New York ? Investors perturbed by the government’s latest gross domestic product report sent stocks sharply lower Thursday, halting a two-day rally. The Dow Jones industrials dropped more than 160 points, giving the blue chips a two-week loss of nearly 900 points.

The sell-off wasn’t surprising as the GDP news confirmed investors’ fears about a frail economy. But the larger issue remained the market’s concern that a war with Iraq would further suppress an already-weak economic recovery.

The Dow closed down 165.58, or 2 percent, at 7,945.13. The blue chips more than wiped out a gain of 121.15 from the previous two sessions, their first multiple-day winning streak in two weeks.

The Dow closed back below the 8,000 level, as it did Monday for the first time in three months.

The broader market also fell sharply. The Nasdaq composite index sank 35.71, or 2.6 percent, to 1,322.35. The Standard & Poor’s 500 index slid 19.75, or 2.3 percent, to 844.61.

All three indexes suffered their eighth decline in 11 sessions. For the Dow, all but one of its eight losing sessions resulted in a triple-digit loss. During the past 11 sessions, the Dow has plummeted 897.49.