The market continued a decline that began late yesterday and kept falling despite some reassuring government data.
The Dow Jones industrial average fell 92.75 points to close at 6,927.38. Declining issues outnumbered advancers on the New York Stock Exchange, where volume was 490.24 million compared with 519.298 yesterday.
The Standard & Poor's 500-stock index was down 9.69 to 802.80 while the NYSE composite index fell 4.48 to 421.09.
The Nasdaq composite was off 18.16 to 1,347.42. The American Stock Exchange market value index closed at 597.43, down 1.72.
This morning, the Commerce Department said construction of new homes and apartments totaled 1.35 million at a seasonally adjusted annual rate, well below what analysts had expected.
"There's a lot of information coming out, but there's not a strong pattern that would be moving the market in either direction," said Mary Farrell, analyst at PaineWebber Inc.
The market drop followed declines in Treasury bond prices and the dollar that finished lower in European and U.S. trading.
Lower bond prices mean higher interest rates, and that, in turn, means corporations end up paying higher borrowing costs. A lower dollar makes the market less attractive to foreign investors.
The price of the Treasury's main 30-year bond was down 29/32 point this afternoon, while its yield rose to 6.65 percent from 6.58 percent late yesterday. Prices and yields move in opposite directions.