Stocks posted their steepest one-day decline this year, finishing in negative territory for the fifth-straight session Tuesday, amid concerns over the health of the global economy and the start of earnings season.
The Dow Jones Industrial Average tumbled 213.66 points, or 1.65 percent, to finish at 12,715.93, logging its biggest one-day drop this year, led by BofA and Caterpillar . The blue-chip index is down for the fifth-consecutive session.
The S&P 500 slumped 23.61 points, or 1.71 percent, to close at 1,358.59, below the widely-followed technical level of 1,370. The Nasdaq dropped 55.86 points, or 1.83 percent, to end at 2,991.22.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, jumped above 20.
All 10 key S&P sectors finished firmly in the red, led by consumer discretionary and banks.
The selloff started last week, initially fueled by doubts over the strength of the economy and the Fed's willingness to continue providing further stimulus to bolster the recovery.
- Read More: Euro Crisis Deja Vu Sends Stocks Skidding
Concerns over rising borrowing costs for European countries added to woes and kept investors on edge. Yields on 10-year Spanish bonds jumped to the highest level of the year, while Italian 10-year yields gained near the highest level in almost two months.
European shares hit a 12-week low following the long Easter weekend, amid growth worries and as traders reacted to last week's weaker-than-expected U.S. jobs datafor the first time.
"Historically, markets tend to perform poorly in the week before Tax Day (Apr. 17 this year) amid pressure for some investors to sell shares to make due on their tax payments."
And China's trade report showed the world's second largest economy may be headed for a soft landing. GDP growth is on course for its slowest year of expansion in a decade.
“Investors are donning those safety glasses and becoming quite defensive ahead of earnings season and ahead of the [euro zone] peripheral risks that seem to be re-emerging yet again,” said Lincoln Ellis, chief investment officer at Strategic Financial Group.
Dow component Alcoa is slated to post earnings after-the-bell, marking the unofficial start to earnings season. Google , JPMorgan and Wells Fargo are also scheduled to report throughout the week.
Apple's market cap briefly crossed the $600 billion threshold. The move comes only about a month after the tech giant reached the $500 billion mark. Microsoft was the only other company to ever hit the same level in December 1999.
Hewlett-Packard was the only Dow gainer after news the IT giant said it will start offer cloud-based computing service, competing with the likes of Amazon.com .
Among financials, FBR raised its price target on a handful of large banks including BofA , JPMorgan and WellsFargo.
Oil prices fell for a second sessionsettling near $101 a barrel, dragging major oil companies including Chevron and ExxonMobil lower.
Best Buy turned lower after briefly rallying earlier following news that CEO Brian Dunn resigned. The firm's director Mike Mikan has been named interim CEO.
Supervalu surged after the supermarket chain topped earnings expectations and issued a full-year profit forecast above estimates.
Treasury prices fellafter the government auctioned $32 billion in 3-year notes at high-yield of 0.427 percent and bid-to-cover of 3.36.
On the economic front, wholesale inventories rose more than expectedin February to 0.9 percent to a record $478.9 billion, according to the Commerce Department, after an upwardly revised 0.6 percent rise in January.
Small business confidence slipped for the first time in six months, further supporting the notion that economic growth slowed in the first quarter.
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Coming Up This Week:
WEDNESDAY: Weekly mortgage apps, import & export prices, Kansas City Fed pres speaks, oil inventories, Boston Fed pres speaks, 10-yr note auction, Fed's Beige Book, St. Louis Fed pres speaks, Carnival shareholders meeting; Earnings from Progressive
THURSDAY: International trade, jobless claims, PPI, Philadelphia Fed pres speaks, 30-yr bond auction, Minneapolis Fed pres speaks; Earnings from Rite Aid, Google
FRIDAY: CPI, consumer sentiment, Bernanke speaks; Earnings from JPMorgan, Wells Fargo
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