NEW YORK (CNNfn) - Wall Street was left to lick its wounds Thursday after suffering its worst one-day tumble this year, as crowds of investors fled the market fearing a global economic rout.
The Dow Jones industrial average lost 357.36 points, or 4.2 percent, to 8,165.99. It was the blue chip index's largest one-day point drop this year and the third largest in its history.
Trading volume on the New York Stock Exchange was heavy and market breadth was sharply negative. Some 943 million shares changed hands, with declines beating advances 2,885 to 354.
The Nasdaq Composite tumbled 81.71, or 4.6 percent, to 1,686.41, its second-worst one-day point decline ever. The S&P 500 index shed 41.60, or 3.8 percent, to 1,042.59, the third-largest one-day point decline in its history.
Selling was broad-based, and all major market gauges felt the sting. The Russell 2000 index of small cap stocks lost 14.32, or 3.8 percent, to 366.10, and the Dow transports fell 114.56, or 3.9 percent, to 2,830.78. The Dow utilities index suffered the least, losing 2.87, or 1 percent, to 281.38.
"We're in a bear market," said Bill Meehan, senior market analyst at Cantor Fitzgerald. (292K WAV) or (292K AIFF)
Once again, concerns that the world economy is in for trouble loomed large in investors' minds, and once again, the worst news came from Moscow.
The Russian ruble continued its slide overnight, and for the second day in a row the country's central bank suspended all currency trading on the Moscow Interbank Currency Exchange. Later, the central bank extended the suspension through Friday.
"In practice, what you may see over time is a devaluation on the scale of something that you've seen in Southeast Asia," said Sonja Gibbs, strategist at Nomura International. "So you could see the ruble losing as much as, say, 75 percent of its value over time."
Meanwhile, calls for President Boris Yeltsin's resignation and rumors that he already had stepped down wreaked additional panic among market players.
Germany and other Western lenders were quick to warn Moscow they will not bail Russia out of its crisis with a quick cash injection, unless Moscow implements tough and sweeping economic reform. German Chancellor Helmut Kohl planned calls to U.S. president Bill Clinton and British prime minister Tony Blair to discuss the Russian crisis. Kohl already has spoken to French president Jacques Chirac.
The White House kept a close eye on the Russian troubles and Clinton's national security adviser, Sandy Berger, said Moscow must act swiftly to stabilize its financial markets and introduce economic reforms.
Later in the day, acting Russian prime minister Viktor Chernomyrdin said the government in Moscow had taken a series of measures to halt the ruble's slide and shelter the economy, with the backing of International Monetary Fund chief Michel Camdessus. Chernomyrdin called the situation in his country "difficult" but "absolutely manageable."
The only market investors felt safe in was the market for U.S. Treasury securities. Bonds rallied as panicked investors from around the world sought the safety of debt instruments backed by the U.S. government. The benchmark 30-year Treasury bond rose 22/32 point in price, lowering the yield to 5.37 percent, closing at a record low. News that U.S. economic growth in the second quarter slowed down but still surpassed analysts' expectations helped underpin the gains.
The dollar lost its gains against the German mark, hurt by the stock market's nose dive.
The greenback also fell against the Japanese yen after overnight Tokyo's influential Vice Finance Minister for International Affairs Eisuke Sakakibara once again raised speculation that a yen-propping market intervention might not be far off.
Multinationals hit the hardest
Shares of multinational corporations and banks were hit the worst, as their profits stand to lose the most in a global economic slowdown.
Large financial companies, whose exposure to international currencies and holdings of overseas bonds make them very vulnerable in times of world market troubles, led Wall Street on the way down. Citicorp (CCI) fell 11-7/8 to 122 and Chase Manhattan (CMB) shed 6 to 58-1/4.
Republic New York (RNB), the parent company of Republic National Bank, fell 4-5/8 to 45-1/2 after issuing a profit warning and citing loses from Russian debt investments for its problems. Republic said each dollar it invested in short-term Russian Treasury bills is now worth 15 cents.
In the brokerage corner, shares of Lehman Brothers (LEH) plunged 7-1/4 to 50-7/16 and Merrill Lynch (MER) lost 6-5/16 to 78-5/16.
Among the biggest loser on the Dow, shares of J.P. Morgan (JPM) tumbled 13-3/16, or more than 11 percent, to 104-3/4.
Shares of fellow Dow member Travelers Group (TRV) lost 3-3/4 to 50-7/8 and American Express (AXP) dropped 6-3/16 to 91.
And Coca-Cola (KO) shed 4-7/16 to 74-3/4 after Merrill Lynch downgraded the company to "near-term neutral" from "accumulate." Merrill based its decision on bleaker profit prospects for the company because of the international market malaise. The brokerage kept its long-term "buy" rating on Coca-Cola.
Large technology stocks, which also rely on sales overseas for a large part of their revenues, headed south with the rest of the market. Among the Dow components, IBM (IBM) shed 5-5/8 to 125-1/4, and Texas Instruments (TXN) fell 2-9/16 to 53-5/8.
Losses among Nasdaq heavyweights also were painful. Shares of Dell (DELL) fell 3-9/16 to 125-1/16, Intel (INTC) lost 3-1/4 to 79-3/4 and Microsoft (MSFT) dropped 3-5/16 to 109-1/4.
(Click here for a look at today's CNNfn market movers.) 
-- by staff writer Malina Poshtova Zang
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