Dow finishes down 634 points

The Dow Jones Industrial Average plunged well-below the psychologically-significant 11,000 mark, led by BofA [BAC 6.51 -1.66 (-20.32%) ] and Alcoa [AA 11.33 -1.46 (-11.42%) ].

The S&P 500 and the tech-heavy Nasdaq finished down more than 6 percent each. August is already on track to be the worst month for both indexes since Oct. 2008.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, spiked above 40 to touch its highest level since Mar. 2009.

All 10 S&P sectors were lower, led by banks, energy and materials. Financials have plunged more than 20 percent this year.