At 1400 GMT the Dow Jones Industrial Average was down 79.24 points (0.63 percent) at 12,550.79, adding to Wednesday's 1.02 percent rout.

The broader Standard & Poor's 500 index dropped 8.42 points (0.63 percent) at 1,333.66, while the tech-heavy Nasdaq Composite fell 15.79 points (0.55 percent) to 2,829.27.

The continuing fall in the crude oil price, helped by the International Energy Agency's new forecast that demand is set to ease, pushed down big energy counters, dragging the Dow lower.

"Persistently high prices at this stage of the economic cycle may ultimately sow the seeds of their own destruction," the agency said.

ExxonMobil was off 1.9 percent and Chevron pared 1.7 percent.

Basic materials shares were down 3.5 percent on averaged pulled down by mining firms, as gold, silver and other metals prices plunged on global exchanges.

Cisco shares took a 4.9 percent hit after its fiscal third-quarter report released late Wednesday came with an 18 percent drop in profit from a year earlier, with earnings per share more than 10 percent lower than analysts had expected.

Bond prices fell. The yield on the 10-year Treasury note rose to 3.19 percent from 3.16 percent late Thursday, while that on the 30-year bond edged to 4.31 percent from 4.30 percent.

Bond yields and prices move in opposite directions.