While down sharply at midday, the key averages dropped quickly as investors reacted to the legislation's demise.
While the final numbers were still shaking out, the Dow lost 770 points or 6.9 percent to 10,372.
The S&P 500 dropped 104 points or more than 8 percent to 1,109.
The Nasdaq composite was down about 200 points or 9 percent to 1,983.
Declining issues topped advancers by a 15 to 1 margin.
Preliminary volume on the NYSE topped 6.7 billion shares. Volume on the Nasdaq came to 2.8 billion shares.
Light, sweet crude for November delivery sank $10.52 to settle at $96.36 on the New York Mercantile Exchange.
