Despite a modest gain in factory orders, the markets plunged to close sharply lower as crude oil prices climbed to settle at a record high of $143.57 per barrel. The Dow skidded 167 points to 11,216 while Nasdaq plummeted 54 points to 2251.

On the upside

Bayer paid $90 million to purchase Maxygen's (Nasdaq: MAXY) hemophilia treatment. The deal includes up to $30 million in milestone payments.

Shares of Energy Recovery (Nasdaq: ERII) surged on its first trading day.

Lehman Brothers Holdings (NYSE: LEH) will be paying its employees with more stock, an announcement that reassured investors that the company will not sell itself below its current price.

On the downside

UTStarcom Inc. (Nasdaq: UTSI) announced the sale of its cell phone distribution unit for approximately $240 million to AIG Investments.

Although Acuity Brands (NYSE: AYI) reported higher third quarter earnings that beat expectations, the lighting equipment maker warned of a challenging environment for the fourth quarter.

A drop in coal prices in Europe weighed down shares of Consol Energy (NYSE: CNX).

In the broad market, declining issues outpaced advancers by a margin of more than 5 to 2 on both the NYSE and on Nasdaq. The Russell 2000 which tracks small cap stocks plummeted 19 points to 672.