Trading on Wall Street ended with a whimper Friday with the two most popularly watched market indices, the Dow Jones industrial average and the S&P 500, surrendering all of the gains they had posted so far this year.

The Dow closed at 16,459.75, down 531 points, or a 3.12 percent daily decline; the S&P 500 closed at 1970.89, off 65 points, or 3.19 percent. Those numbers are the working definition of a massive selloff.

The Dow dropped 5.8 percent on a weekly basis, the steepest decline since September 2011.

All told, the Dow is down 10 percent from it's historic May high. Market analysts consider a swing of that size a market correction.

August is typically an unstable month for Wall Street. Still, markets around the world also saw strong sell offs over the last two days.

Oil has dropped below $40 a barrel for the first time since the end of the global economic crisis. Crude fell to $39.86 in afternoon trading.

Oil prices have been falling solidly for eight consecutive weeks. That's the longest streak since 1986. Prices have fallen almost 60 percent since this time last year, and more than 34 percent in just the past three months.

Some of that early decline was due to the expansion of the shale oil supply. 

But recent oil declines are tied to fears that China is slipping close to recession, something that has not happened in 30 or so years.

Economic activity in China is at its lowest point in five years. Beijing's recent decision to devalue its currency in order to shore up less than robust exports was an alarm bell.

“Even the threat of a significant Chinese slowdown,” wrote Elliot Wilson in the respected UK weekly The Spectator two weeks ago, “could send the rest of the world back into recession.”

Europe's economic recovery already is seen as weak -- or spotty, at best.

Was this a bad week for investors, or an indication of more serious things to come? How Asian markets open (late Sunday night EST) could provide a clue.