New York (CNN Business) Johnson & Johnson's (JNJ) stock tumbled 10% on Friday — wiping out close to $40 billion of its market value — after a Reuters report said the company knew for decades that asbestos was in its baby powder.

The company has been grappling with lawsuits alleging some of its talcum powder products caused cancer. But the Reuters report cites documents and other evidence that indicate company executives, mine managers, scientists, doctors and lawyers knew about the problem and failed to disclose it to regulators or the public.

It was J&J's worst day since 2002.

The plunge in J&J's shares rippled across Wall Street. J&J is among the most widely held stocks and it's also a member of the Dow.

Reuters said it examined documents, including depositions and trial testimony, that show that from at least 1971 to the early 2000s, J&J's raw talc and finished baby powders sometimes tested positive for small amounts of asbestos, a human carcinogen that can cause cancer.

Read More