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Wall Street hammered, Dow closes down more than 300 points

Stocks got slammed on Thursday, with the Dow Jones Industrial Average ending the day down 1.87%, at 317 points in the red. The drop wiped out all the benchmark average’s gains for 2014, and put an end to a five-month winning streak for stocks. This was the Dow's largest point drop of the year since February 3; percentage-wise, it's the worst plunge since April 10. At 16,563, the index is well below the all-time closing high of 17,138 hit just a couple of weeks ago.

Additionally on Thursday, the S&P 500 saw a 1.89% drop to end at 1,932, and the Nasdaq fell 1.98%, ending at 4,374.74.

In the attached video, Yahoo Finance editor Phil Pearlman says those looking for answers are going to be disappointed. “Over the last 25 years, stocks have their worst month in August. This is the worst time of the year, and we’re getting a preview of that on the last day of July."

The selling was triggered by a variety of factors. To add to the long-standing laundry list of troubles in Ukraine and violence in the Middle East, Argentina failed to reach a deal with bondholders and defaulted late Wednesday. Argentina’s benchmark Mervel index dropped more than 6.5%. The employment cost index also posted its fastest rise since 2008, stoking fears of inflation and chatter of an earlier-than-expected Fed rate hike.

Though the selling was intense, there was little evidence of the panic that typically marks the end of selloffs. After years of being rewarded for buying every dip, investors are conditioned to treat corrections as buying opportunities, though little buying was apparent as of the close.

So is this the correction investors have been waiting for?

"I have no idea; my best guess is that [it is]" says Pearlman. But if we get a 4%-5% pullback, he continues, the resulting "panic" could lead to a bottom, which will provide an attractive entry point for some investors with cash ready to put into the market.

Says Yahoo Finance's Jeff Macke, "If you're too nervous to sleep tonight, you're too long stocks... . Trim a little gains if ... you're already nervous. If not, ride it out. This is the way markets are supposed to behave."