The Dow Jones industrial average fell 49.94 to 5,606.96, triggering New York Stock Exchange curbs on computer-driven trading in the last half hour.
Broader measures were negative too, with investors bracing for market jolts from tomorrow's report on August employment. If payroll growth is significantly higher than expected it would increase the prospect that Federal Reserve will raise interest rates soon to keep inflation in check.
Decliners outnumbered advancers by more 2 to 1 on the New York Stock Exchange, with 781 up, 1,609 down and 786 unchanged.
NYSE volume totaled 360.54 million shares vs. 351.28 million yesterday. The NYSE's composite index fell 2.73 to 349.64, and the Standard & Poor's 500-stock index fell 6.13 to 649.48.
The Nasdaq composite index fell 18.16 to 1,125.66, and the American Stock Exchange index fell 0.63 to 556.71.
Stock were pressured from the start as bond prices sagged on news that the number of Americans filing first-time claims for unemployment benefits fell by 15,000 to 316,000 last week, an unexpectedly large decline that provided further evidence of the economy's strength.
As bond prices fell, the yield on the 30-year Treasury bond - a key determinant of corporate and consumer borrowing costs - rose to 7.15 percent from late yesterday's 7.09 percent.