The Dow Jones industrial average slumped 157.11 to 6583.48, bringing its two-day loss to 297.22 points, or 4.4 percent. The 30-stock average is now more than 500 points from its all-time high of 7085.16 set March 11.

Declining issues led advancers by nearly a 4-to-1 margin on the New York Stock Exchange, with 556 up, 2,152 down and 635 unchanged. NYSE volume totaled 555.73 million shares vs. 475.93 million Thursday. Markets were closed for Good Friday.

The Standard & Poor's 500 index fell 16.76 to 757.12 while the Nasdaq composite dropped 27.8 to 1221.72. The NYSE composite index fell 8.88 to 398.55.

The American Stock Exchange composite index fell 9.19 to 368.71. The Russell 2000 list of smaller companies fell 6.39 to 342.56.

Last week, the Federal Reserve boosted lending rates for the first time in more than two years. That move led banks to raise the rates they charge on loans, which could eventually hurt spending. Analysts said higher rates also may lure investors into bonds and other fixed-income investments.

U.S. bonds were little changed with yields at six-month highs. Short-term bills rose as stock investors piled into safer fixed-income securities to protect themselves from further declines in the equity markets. The 30-year bond yield rose 1 basis point to 7.09 percent.