The Dow Jones Industrial Average dropped sharply to break below the psychologically-significant 11,000 mark, led by BofA [BAC 6.67 -1.50 (-18.36%) ] and Alcoa [AA 11.45 -1.34 (-10.48%) ], after logging its steepest weekly decline since Mar. 2009 last week.

The S&P 500 and the tech-heavy Nasdaq were down almost 5 percent. August is already on track to be the worst day for both indexes since Oct. 2008.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, spiked above 40 for the first time since May 2010.

All 10 S&P sectors were lower, led by energy, banks and industrials. The industrial and financial sectors are down over 20 percent since the market’s April highs.

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