At 10:50 a.m., the Dow Jones Industrial Average lost 89.09 points from the previous day to 12,412.02. It briefly shed by more than 100 points to hit the 12,300 level for the first time since early April 2007.

The tech-heavy Nasdaq Composite Index plunged 52.50 points to 2,365.09.

The Dow industrials temporarily moved up to positive territory on bargain hunting after the previous day's slide of more than 270 points.

Selling overwhelmed buying in later trading, however, reflecting persistent concerns about the health of the U.S. economy due to expanding subprime mortgage and credit problems.