The US Commerce Department reported yesterday that construction of new homes and apartments dropped by 6.3 percent in September, bigger than the 1.6 percent decrease that economists had expected. The total production declined to a seasonally adjusted annual rate of 817,000 units, which is the slowest pace since January 1991.

A report from the University of Michigan showed consumer sentiment fell to 57.5 in October from 70.3 in September.

The Dow Jones industrial average fell 127.04, or 1.41 percent, to 8,852.22. The Standard & Poor's 500 index fell 5.88, or 0.62 percent, to 940.55, while the Nasdaq composite index fell 6.42, or 0.37 percent, to 1,711.29.