The Dow Jones industrial average fell 98.81 to close at 6,303.71, with two-thirds of those losses coming in the last hour.
Decliners led advancers by 9 to 5 on the New York Stock Exchange, with 915 up, 1,639 down and 773 unchanged. NYSE volume was 492.76 million shares vs. 494.19 million yesterday.
Broad-market indexes were mostly lower, except for the Nasdaq composite, which was kept afloat by technology shares.
The Standard & Poor's 500-stock index fell 11.42 to 729.31, and the NYSE's composite index fell 5.25 to 384.29. The Nasdaq composite index declined 10.80 to 1,298.32, and the American Stock Exchange's index fell 4.81 to 579.11.
Stocks started the day higher after three encouraging economic reports, but the rally was over in the first hour.
Investors are jittery about a host of issues, beginning with last Thursday's statement by Federal Reserve Chairman Alan Greenspan that stocks were in the throes of "irrational exuberance."
Some experts said Greenspan was trying to talk the market lower, and may even be preparing to increase interest rates, if not this month then after the first of the year.
This afternoon, the long bond was down 1/8 point and yielding 6.62 percent, after rising one point earlier today.