After recovering from an unprecedented 1,000-point decline at the open on Monday, the Dow finished down nearly 600 points.
Global fears about China's economic slowdown are shaking stock markets around the world for a second week in a row. The wave of selling knocked the S&P 500 into correction mode for the first time since 2011.
Within minutes after the opening bell, the Dow plummeted 1,089 points. That is the largest point loss ever during a trading day, surpassing the Flash Crash of 2010.
"We have not seen this level of full-blown panic in markets for quite some time," said Peter Kenny, chief market strategist at Clear Pool Group, a financial technology firm.
A number of iconic American companies watched their stock prices dramatically decline in an instant. Shares of General Electric (GE) and Pepsi (PEP) crashed more than 20% apiece at one point, while Costco (COST) fell 16%.
In fact, more than 1,200 stocks and exchange-traded funds suffered declines so great that they triggered automatic trading halts put in place by the stock exchanges, according to Nasdaq.
It all started with Shanghai's 8.5% drop
The dramatic selling began overseas. China's Shanghai Composite plummeted 8.5%, wiping out all of its massive gains so far this year. Not only has an apparent bubble in Chinese equities popped, but the country's economy may be slowing much faster than feared.
Last week's big selloff gathered serious momentum after China said its manufacturing activity -- a critical metric on growth -- tumbled to a six-year low in July.
