Concerns about the economy sent the markets tumbling in the late afternoon to close sharply lower before the start of the holiday shopping season with the Dow plummeting 211 points to 12,799. Nasdaq plunged 35 points to 2562.

On the upside

News that stem cells may be developed from skin cells rather than embryos lifted shares of StemCells (Nasdaq: STEM).

Although New York & Co. (NYSE: NWY) swung to a third quarter loss, revenue rose to surpass expectations.

Capstead Mortgage (NYSE: CMO) raised nearly $81 million in its offering of 8 million shares of common stock.

On the downside

SunTrust Robinson Humphrey downgraded Stein Mart (Nasdaq: SMRT) saying that intense promotions by competitors will hurt earnings.

Lehman Brothers downgraded ITC Holdings (NYSE: ITC) after a Minnesota judged recommended that the Minnesota Public Utilities Commission not approve ITC's acquisition of certain Alliant Energy assets.

Shares of LDK Solar (NYSE: LDK) plunged after rival Trina Solar reported disappointing earnings.

In the broad market, declining issues outpaced advancers by a margin of nearly 3 to 1 on the NYSE and by nearly 5 to 2 on Nasdaq. The Russell 2000 which tracks small cap stocks tumbled 9 points to 740.