US stocks extend losses; Dow -2.2%

Wall Street stocks sharply extended losses Thursday morning after Federal Reserve Chair Janet Yellen said it was "premature" to assess the impact of global market turmoil on the US economy.

Near 1650 GMT, the Dow Jones Industrial Average was at 15,570.85, down 343.89 points (2.16 percent).

The broad-based S&P 500 fell 33.61 (1.81 percent) to 1,818.25, while the tech-rich Nasdaq Composite Index dropped 59.05 (1.38 percent) to 4,224.54.

US stocks were in retreat from the beginning of the session after Asian and European markets tumbled on worries about a global slowdown. Oil prices continued to fall, further dimming sentiment.

US markets took another leg lower after Yellen told a Senate panel that she still believes the US economy is on solid footing based on persistent strength in the domestic jobs market.

Asked if the United States could be facing recession amid the global downturn, Yellen downplayed the chance of a contraction in the economy.

She said the Fed is "absolutely" taking into consideration in its policy deliberations the risks from economic problems in other countries and regions.

However, she said, "it's premature to make a judgment" on the impact of market turbulence.

Art Hogan of Wunderlich Securities tied Thursday's selloff to the drop in oil prices, but said Yellen's remarks likely contributed to the poor sentiment.

"I don't know that there's anything reassuring coming out of her testimony," he said.

Congressional questioning of Yellen on the prospect of negative interest rates is "a buzzword or talking point that's not reflected upon positively," he said.

US banks suffered especially large drops, with Bank of America down 6.7 percent, Citigroup 6.0 percent and JPMorgan Chase 4.0 percent.

Petroleum-linked shares also tanked. Dow member Chevron lost 2.7 percent, EOG Resources 4.0 percent and Halliburton 4.4 percent.