U.S. stocks declined on Thursday, with the Dow Jones Industrial Average dropping over 200 points, as worries mounted about China's economy and escalating tensions in Ukraine.

"The New York Times broke a story that Russian forces were conducting new military operations near the Ukrainian border. That news probably triggered the hard downside move in the averages, which had already given back a good part of the opening rally," Elliot Spar, market strategist at Stifel, Nicolaus, wrote in afternoon commentary.

And, Reuters cited banking and industry sources in reporting increasing concerns about the financial health of bloated industries in China have caused many banks to reduce lending in these sectors up to 20 percent.

Alan Skrainka, chief investment officer at Cornerstone Wealth Management, pointed to a chart making the email rounds showing the correlation between NYSE margin debt and the S&P, with margin debt exceeding its 2007 peak.

"It has people a little shook up; there's speculative froth in the market that needs to be worked out," said Skrainka, who added the source for the chart was Jeffrey Gundlach, the founder of Doubleline Capital.

The CBOE Volatility Index (VIX), a measure of investor uncertainty, gained 12 percent to 16.18.



"Since the beginning of March, the action has been poor all around. We're in a bit of a vacuum, and will probably have to wait until earnings season to get a boost," said Dan Greenhaus, chief global strategist at BTIG.

Ever since the spike in late February, the market has been trending lower. "I'm not sure there's any theme to that, we're just in a general malaise, after a pretty good recovery from the EM (emerging market) action," Greenhaus added.



Krispy Kreme Doughnuts jumped after hiking its yearly outlook. Williams-Sonoma gained after the seller of upscale cookware and home furnishings projected 2014 sales above expectations. Dollar General dropped after the discount retailer for the holiday quarter. Amazon.com rose after the online retailer hiked the cost of its Prime membership. Goldman Sachs Group fell 1.7 percent after S&P Capital IQ downgraded its shares to sell from buy.