U.S. stocks took a hit Thursday, with the Nasdaq logging its biggest drop since November 2011, as sell-off on tech shares resumed after a two-day rally for the market.

The Dow Jones Industrial Average slipped 266.96 points, or 1.62 percent, to 16,170.22. [Hong Kong Company Formation]The S&P 500 tumbled 39.10 points, or 2.09 percent, to 1,833.08. The Nasdaq Composite Index plummeted 129.79 points, or 3.10 percent, to 4,054.11.

The blue-chip Dow and the broader S&P 500 declined the most in two months.

All the three indices wiped out all its gains in the previous two trading sessions, sending the Nasdaq to a two-month low, which was dragged down by technology and biotech shares.

After posting a modest decline at the open, the market losses accelerated throughout most of the session, although U.S. jobless claims last week fell to a near seven-year low.

The number of Americans who initially applied for jobless benefits in the week ending April 5 sank by 32,000 to a seasonally adjusted 300,000, said the Labor Department Thursday, adding that the last time initial claims were this low was in May 2007.

Wall Street rallied over 1 percent Wednesday on the Federal Reserve's dovish minutes of its March policy meeting, which eased investors' concerns over a possible earlier-than-expected rise in interest rate.

However, renewed worries about over-valuation of momentum stocks completely outweighed the optimistic sentiment triggered by Wednesday's Fed minutes, shocking major indices especially the tech-rich Nasdaq.

After leading the market's bullish run in the stellar year of 2013, technology and biotech companies had undergone a significant pullback, including Tesla, eBay, Amazon.com, Facebook and Google, [Offshore Company Incorporation]as investors continued to flee from high-growth tech stocks to intrinsic-valued stocks amid tech-bubble concerns.

Among other data, U.S. import prices rose 0.6 percent in March, after a 0.9-percent increase in February, while export prices added 0.8 percent in March following a 0.7-percent advance the previous month, the Labor Department reported Thursday.

In corporate news, Ally Financial Inc. made its trading debut on the New York Stock Exchange Thursday after the auto lender priced its initial public offering (IPO) at 25 U.S. dollars a share on the previous day. The company's shares closed at 23.98 dollars apiece.