The Dow Jones industrial average fell 76.95 to 5,498.27, after sliding about 100 points late in the session. The blue-chip average had stabilized at a loss between 20 and 30 points around midday, but another wave selling in the bond market spurred a steeper drop in stocks.

Among New York Stock Exchange issues, 557 rose, 2,012 fell, and 586 were unchanged. Volume totaled 440.00 million shares vs. 403.30 million in the previous session.

Broader indicators also tumbled as long-term interest rates jumped above 7 percent. The interest rate on the 30-year Treasury bond - a benchmark for many loans - hasn't closed above 7 percent in almost a year.

Among the broader markets, the NYSE composite fell 5.32 to 346.21. The Standard & Poor's 500-stock index fell 11.20 to 643.38.

The Nasdaq composite fell 20.12 to 1,179.53. The Russell 2000 fell 4.34 to 345.94.

At the American Stock Exchange, the market value index fell 4.81 to 588.97.

Bond prices started tumbling today after the Commerce Department reported that the gross domestic product - the nation's total output of goods and services - sprang back to life in the first three months of the year, growing at an annual rate of 2.8 percent.

The five-fold increase from the fourth quarter was far above expectations. The strength came in renewed consumer spending, particularly for computer products, which soared during the period, and in business investment.