The Dow Jones industrial average tumbled 170 points, its fourth straight triple-digit swing.
Financial stocks led the latest pullback. Obama was to announce the plan for tougher regulation of the nation’s banks in remarks at 11:40 Eastern time, and analysts said some investors were nervously pulling money out of the market.
Analysts said concerns mounted about possible new restrictions on banks’ ability to trade using their own funds. Restricting some of these trades could hurt profits at big banks.
Broader concerns also dogged investors. Patrick Galley, chief investment officer at RiverNorth Capital in Chicago, said stocks have risen so fast in the past 10 months that expectations about an economic recovery are getting too high.
“The market can be quite fickle just because of the huge run-up that we’ve had,” he said. “A lot of folks have their trigger finger on the sell button if they start to sense that news won’t meet expectations.”
The market earlier was mixed as good earnings news was tempered by an unexpected jump in initial jobless claims. But banks, which have driven the market over the past year and a half, were the focus by late morning.
The Labor Department said workers filing for unemployment benefits for the first time rose by 36,000 to 482,000 last week. Economists polled by Thomson Reuters were expecting a small drop. The four-week average rose for the first time since August.
The report provided a grim reminder that while the economy might have improved modestly, a robust recovery is unlikely until companies start adding jobs. The unemployment rate remained at 10 percent last month.
Traders said weakness in manufacturing also brought concern that the economy might not be recovering as quickly as hoped. The Philadelphia Federal Reserve said manufacturing in its region fell in January from December. Its index of regional manufacturing conditions fell to 15.2 from a revised 22.5 last month.
The Dow fell 170.57, or 1.6 percent, to 10,434.70. The broader Standard & Poor’s 500 index fell 16.01, or 1.4 percent, to 1,122.03. The Nasdaq composite index fell 21.21, or 0.9 percent, to 2,270.04.
Stocks had tumbled on Wednesday after China said it would curb bank lending to slow down its economy. The latest sign of China’s supercharged growth came out on Thursday as the country reported 10.7 percent economic expansion in the fourth quarter and 8.7 percent for all of last year. The rapid growth reinforced concerns that China will take more steps to tighten monetary policy and rein in its economy, which could dampen a global economic rebound.
Bond prices jumped as the stock market fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.62 percent from 3.65 percent late Wednesday.
The dollar rose against other major currencies, while gold fell. A rise in the dollar hurt commodity prices, which become more expensive for foreign buyers when the dollar strengthens.
Crude oil fell 90 cents to $76.84 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies fell 8.32, or 1.3 percent, to 631.29.
Three stocks fell for every one that rose on the New York Stock Exchange, where volume came to 452.1 million shares compared with 402 million shares traded at the same point Wednesday.