NEW YORK (CNNMoney.com) -- Stock selling accelerated Tuesday afternoon as falling markets in China and Europe and a steep decline in durable goods orders sparked a rush for the exits on Wall Street.

News that Vice President Dick Cheney was the apparent target in a Taliban suicide bombing attack in Afghanistan added to the day's worries.

A worried trader eyes a monitor on the floor of the New York Stock Exchange, Tuesday, Feb. 27, 2007. Quick Vote Is the stock selloff just a blip or the start of a longer downturn? Blip

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The Dow Jones industrial average (down 211.57 to 12,420.69, Charts) tumbled 200 points, or about 1.6 percent, with roughly two hours left in the session. The broader S&P 500 (down 31.04 to 1,418.33, Charts) index fell 1.9 percent. Both blue-chip averages have fallen for the last four sessions.

The Nasdaq (down 70.26 to 2,434.26, Charts) composite slumped 2.5 percent after having slid for the last two sessions. The Russell 2000 (down 23.11 to 800.58, Charts) small-cap index lost 2.5 percent.

Putting a limit on the declines, the New York Stock Exchange said it imposed trading curbs meant to limit the market selloff, CNN has confirmed.

Treasury bonds rallied as investors sought a safe place to park their money while the dollar fell.

Chinese stocks slumped 9 percent Tuesday - the worst one-day selloff in a decade - on concerns that the government would interfere to cool the speculation that drove the Shanghai market up nearly 130 percent last year. (Full story).

Other Asian markets slumped in tandem. European shares also tumbled.

"The selloff certainly demonstrates somewhat starkly the inter-connectedness of stock markets around the world," said Hugh Johnson, chief strategist at ThomasLloyd Global Asset Management.

"Markets can decline in one seemingly isolated part of the world and that decline can be transmitted to other parts of the world through the psychology," he said.

The slump in world markets exacerbated concerns that Wall Street is due for a selloff after a nearly eight-month rally that has sent the Dow industrials to record highs and the Nasdaq and S&P 500 to more than 6-year highs.

Market veterans have been looking for a stock selloff for some months now due to the combination of slowing economic and earnings growth expected this year, said Harry Clark, CEO at Clark Capital Management.

Although some analysts have been calling for a pullback of about 10 percent for the market, Clark said a smaller drop is more likely.

"We'll probably see a decline of about 4 or 5 percent and then it will be done," he said, noting that a lot of the selling will be washed out within the next week or so as the shock wears off.

Slowing growth ultimately drags on corporate profits, making stocks more expensive relative to earnings. For more on the day's economic news, click here.

ThomasLloyd Global's Johnson agreed that the selling should ease. But markets will "continue to be vulnerable to big decisions by big policy-makers in big places like China," he said.

A morning report in the United States showing a steeper-than-expected decline in durable goods orders in January added to concerns about slowing economic growth.

In addition to durable goods orders, the morning brought the latest read on the housing market, where sales rose but prices showed more weakness.

The drop in durables dragged on blue chips such as Dow components Alcoa (down $1.36 to $34.00, Charts), Caterpillar (down $2.26 to $65.00, Charts), General Motors (down $1.59 to $32.38, Charts) and Boeing (down $1.41 to $87.52, Charts).

All 30 Dow components slipped. Other losers included the blue-chip average's technology components, IBM (down $1.64 to $95.27, Charts) and Hewlett Packard (down $0.83 to $39.46, Charts).

Also hurting stocks Tuesday: news of a suicide bombing attack at the entrance to the main U.S. military base in Afghanistan during a visit by Dick Cheney. The attack killed at least 23 people. (Full story).

Apple Computer (Charts) declined after it said late Monday that its Apple TV will be delayed until mid-March.

Nordstrom (down $3.94 to $52.66, Charts) slipped 5 percent after reporting weaker-than-expected fourth-quarter financial results.

Market breadth was negative On the New York Stock Exchange, decliners trounced advancers by more than five to one on volume of 1.29 billion shares. On the Nasdaq, losers beat winners by almost seven to one on volume of 1.76 billion shares.

Existing home sales grew at a faster-than-expected pace in January, in a report that also showed the pace of sales dropped from a year ago. The median price of a home sold in January was down versus a year ago. (Full story).

Another report showed that consumer confidence saw a surprise rise in February versus forecasts for a drop.

Investors were also still digesting Monday reports that former Federal Reserve Chairman Alan Greenspan says the economy could fall into a recession by the end of 2007. (Full story).

Tuesday kicks off a busy week for economic news, with reports due later in the week on fourth-quarter gross domestic product growth, new home sales, personal income and spending and the manufacturing sector.

In Iraq, a bomb that exploded near a soccer field killed 18 children and wounded at least 25 others.

Treasury prices rallied as investors sought safety, lowering the yield on the benchmark 10-year note to 4.55 percent from 4.62 percent late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and the yen following the durable goods orders report.

U.S. light crude oil for April delivery rose 41 cents to $61.80 a barrel on the New York Mercantile Exchange. The price of oil rose for the last four sessions.

COMEX gold for April delivery fell $3.10 to $686.70 an ounce.

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