NEW YORK (AP) -- Worries about the U.S. economy are sending the Dow Jones industrial average down 251 points, the second-worst drop this year.
The bad news kept piling up Thursday.
The Philadelphia branch of the Federal Reserve also reported a sharp drop in manufacturing in the Northeast.
The Dow closed down 2 percent at 12,574. Alcoa fell the most.
The Standard & Poor's 500 index lost 30 points to 1,326, a decline of 2.2 percent. The Nasdaq fell 71 points, 2.4 percent, to 2,859. All three major indexes lost their gains for the week.
More than four stocks fell for every one that rose on the
Investors were also concerned about word that Moody's Investors Service was set to cut credit ratings of 15 major banks including Bank of America, Citigroup, JPMorgan. The announcement came about 90 minutes after the close of trading on Thursday.
The ratings agency says the banks' long-term prospects for profitability and growth are shrinking amid volatile financial markets.
U.S. banks seeing downgrades include Bank of America, JPMorgan Chase and Goldman Sachs. A downgrade usually means it becomes more costly for banks to raise money by selling debt, as investors demand higher interest for riskier debt.