Shares of Johnson & Johnson (J&J) fell over 6% after Reuters reported that the pharmaceutical company knew that its baby powder was contaminated with cancer-causing asbestos.
The decline in shares wiped off about $24bn from the company's market capitalisation, and made the stock the biggest drag on the Dow Jones Industrial Average and S&P 500 indexes.
J&J was found to have known about the presence of small amounts of asbestos in its products from as early as 1971, a Reuters examination of company memos, internal reports and other confidential documents showed.
Reuters' report also showed the company had commissioned and paid for studies conducted on its Baby Powder franchise and hired a ghost writer to redraft the article that presented the findings in a journal.
J&J has been battling some 6,000 cases claiming its Baby Powder and Shower to Shower products cause ovarian cancer.
The products have also been linked with mesothelioma, a rare and deadly form of cancer that affects the delicate tissue that lines body cavities.
In response to the reports, J&J said that "thousands of independent tests" have shown that its talc is safe.
A spokesman for the company said that "any suggestion that J&J knew or hid information about the safety of talc is false".