The Dow Jones Industrial Average plummeted 353.87 points, or 2.34 percent, to end at 14,758.32, with all 30 components in the red. The last time the blue-chip index closed down more than 300 points was last November. The Dow is down more than 5 percent since its May closing high.

The S&P 500 tanked 40.74 points, or 2.50 percent, to close at 1,588.19, crashing through a key 1,598 level that traders had been watching. And the Nasdaq tumbled 78.57 points, or 2.28 percent, to finish at 3,364.63.

All three major averages were back in negative territory for the week, and on track for their fourth-weekly decline in the last five weeks.

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The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, spiked near 20, hitting a new high for the year.

All key S&P sectors finished sharply in the red. Defensive names have been getting hit the hardest over the last two days, the last two days, with utilities and telecoms down more than 4 percent each.

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Total volume on the NYSE ended at 4.53 billion shares, marking the second heaviest volume day of the year.