Thursday's 3.8% loss took the S&P 500's decline since its January 26 record past 10%, meeting the accepted definition of a correction. Japan's Nikkei 225 fell 508 points, or 2.32 percent, to 21,382, and China's Shanghai composite sank 4.02 percent to 3,130.
Analysts cited higher Treasury bond yields as the catalyst for the drop, coupled with the view that the market surged to unsustainably high levels in December and January in the euphoria over USA tax reform. Several Dow members lost more than five percent, including American Express and Home Depot.
Many analysts see worries about higher United States interest rates and excessive valuations as the catalyst for a pullback that was exacerbated by technical trading factors. "They could be in full panic mode right now".
Bond yields in the USA have also risen in recent weeks, typically a signal of higher rates.
Johnson had predicted on a previous appearance that the S&P 500 would see a decline before continuing on its upward trend - a move he characterized as a "hop, drop and a pop".
"I'd like to see buying come in late in the day instead of having a selloff like we had yesterday".
"The dust hasn't settled yet, and I think both buyers and sellers are trying to figure out what this market really wants to do", Jonathan Corpina, senior managing partner for Meridian Equity Partners in NY, told Reuters on Thursday. Skechers USA climbed $2.88, or 7.5 percent, to $41.06.
The Standard & Poor's 500 index, the benchmark for many index funds, also wavered between gains and losses.
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"That is not to say that we won't see further falls in coming days, but in an environment where growth is good and earnings are expected to rise globally, there are decent underpinnings", said James Knightley, chief global economist at ING.
The Dow and S&P 500, which also soared to a record high of 2,872 on January 26, have both pulled back more than 10 percent in the the past two weeks, thrusting the market into a full correction. That combination usually carries stocks higher. Neither index has closed in a correction in two years. The central bank has been unable to significantly raise its interest rates over the past decade, fearing it could stymie the economic recovery and perhaps cause prices to fall.
A trader works on the floor of the New York Stock Exchange shortly after the opening of the markets in New York October 14, 2015.
Major economies around the world are growing in tandem for the first time since the Great Recession and corporate profits are on the rise.
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