The Dow fell 167 points, or 1 percent, to close at 16,446. It fell as much as 216 points earlier.
The Standard & Poor's 500 index slid 17 points, or 1 percent, to 1,870. The Nasdaq dropped 31 points, or 0.8 percent, to 4,069.
The yield on the 10-year Treasury note fell to 2.49 percent, from 2.54 percent late Wednesday.
Factory output took a breather in April after two months of strong growth. However, the number of people who filed for unemployment benefits fell to its lowest in seven years last week.
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