"Believe you me," Krosby said, "if you think that there is a recession in the offing you are going to see this market sell off. It's sell off first, ask questions later."
It was not the first time that Wall Street worried about the fiscal cliff talks.
On the day after the election, when voters returned divided government to power, the Dow dropped 312 points. On Nov. 14, when President Barack Obama insisted on higher tax rates for the wealthy, the Dow dropped 185 points.
The sharp drop in stocks Friday was reminiscent of, although much smaller in scale than, what happened Sept. 29, 2008, during the financial crisis.
The House defeated a proposed $700 billion bailout of the U.S. financial industry, and the Dow plunged 777 points, its worst one-day decline. Four days later, the House, shaken by what had happened on Wall Street, passed a modified bill.
Stocks closed lower Friday in Asia after House Republicans canceled their vote. The Nikkei index in Japan fell almost 1 percent, and Hong Kong's Hang Seng Index dropped 0.7 percent. Stocks were also lower in Europe.
Among stocks making big moves:
— Walgreen, the nation's largest drugstore chain, slumped $1.24, or 3.3 percent, to $36.31. It filled fewer prescriptions and absorbed costs tied to acquisitions and Superstorm Sandy. The results were worse than financial analysts had been expecting.
— BlackBerry maker Research in Motion dropped $2.21, or 15.8 percent, to $11.74. The company said it won't generate as much revenue from telecommunications carriers once it releases the BlackBerry 10.
— Nike, the world's largest maker of athletic gear, jumped $6.10, or 6.2 percent, to $105.10. It said strong demand in North America led to a 7 percent increase in revenue in the three months ended Nov. 30, balancing out economic weakness in Europe and a slowdown in growth in China.
— Micron Technology dropped 6.9 percent, the biggest decline in the S&P 500 index. The semiconductor maker reported a loss late Thursday as weaker demand for personal computers and an oversupply of certain chips hurt its sales. The stock lost 47 cents to $6.32.