A sudden market correction, apparently caused by a 9% slide in Chinese stocks: The Dow Industrials Fall 500 Points.

Stocks plummeted Tuesday, hurtling the Dow Jones industrials down more than 500 points as Wall Street joined a global market plunge sparked by growing concerns that the U.S. and Chinese economies are cooling and that equities prices have become overinflated.

A 9 percent slide in Chinese stocks, which came a day after investors sent Shanghai’s benchmark index to a record high close, set the tone for U.S. trading. The Dow began the day falling sharply, and the decline accelerated throughout the course of the session before stocks took a precipitous plunge in late afternoon as computer-driven sell programs kicked in.

Investors’ dwindling confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, just a day after former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.

UPDATE at 2/27/07 12:56:43 pm:

A trader on Fox New just said that the market’s systems were registering more than 500,000 trades a second.