At the close, the Dow Jones industrial average was off 334.97 points or two per cent to 16,659.25. Toronto fared slightly better but was still down 205.87 points to 14,460.60, largely on weakness in oil.
The price of a barrel of the North American oil benchmark lost more than $2 to trade at just over $85 US a barrel. That's the lowest price in about a year and a half, dating back to April 2013.
The stock swoon came a day after the Federal Reserve minutes showed a gloomier than expected reading on the economy — implying that it may have to keep cheap lending around for longer to stimulate the economy. (Cheap money is good news for stocks, so counterintuitively, the stock market had one of its better days of the year on Wednesday.)
But as the reality of that bleak outlook sunk in on Thursday, it looks like traders were getting out of stocks en masse and hoarding cash for uncertainty ahead.
'Dead cat bounce'
"We're having a really rough day in the markets and basically giving back everything from yesterday's Fed minutes rally," Colin Ciezynski, market analyst at investment firm CMC Markets told CBC News in an interview "Yesterday's rally was really a ... dead cat bounce."
Oil was a particular source of weakness on both sides of the border. Exxon and Chevron, America's two largest oil companies, lost about three per cent each. Canadian names fared little better, with Suncor and Imperial Oil both losing about 2.5 per cent of their value.
There was no place to hide on the TSX, as all 10 of the stock exchange's subindexes were in negative territory.
"It's a phase we have to go through," Ciezynski said. "It can be very rough for a period of several months."Suggest a correction