Andoil continued to trade lower. London Brent crude fell 1 percent to close at $121.19, while U.S. light crude fell 1.63 percent to $109.24.
Most oil giants declined across the board, including ExxonMobil , ConocoPhillips and Chevron .
The market is likely to be choppy in May through July, as it has been in past summers, but stocks should turn higher again before the end of the year, Jordan Kotick, global head of technical strategy at Barclays Capital, said on CNBC.
"We’re at the highs for the last couple years. This is like the commodity markets, warning us that the market is going to step back for a bit, reassess," Kotick said. "That should give risk a reason to fade into May, June and July."
News that theservice sector slowedin April triggered the broad downdraft in the market, which had hit multi-year highs in April, said Marc Pado, U.S. market strategist and technical analyst at Cantor Fitzgerald.
"We had seen the pendulum swing since Monday in favor of the bears," Pado said. The weak data, including a slowdown in private sector jobs growth, provided "a nudge in the direction we were already going."
Long-term investors weren't all shaken by the day's downdraft. "The long-term trends in the markets are still favorable, still going up," said Mebane Faber, cofounder and portfolio manager at Cambria Investment Management.
Cambria runs an actively traded exchange-traded fund that invests in U.S. and global stocks as well as currencies, commodities, bonds and real estate. The fund is fully invested across all asset classes, although it is short the dollar in favor of foreign currencies, and has a "half weighting," in financials, because the long-term trends point lower.
The portfolio also continues to have a long-term investment in precious metals and energy, although they have scaled back in base metals and agriculture, Faber said.
In market news, Renren surged more than 40 percent on its first day of trading. The Chinese social network firm was priced at $14 a share, at the high end of expectations, before the market opened.
On the tech front, Apple traded flat. Before 11 a.m. ET, a single trade of 100 shares, executed at a sharply lower price, was cancelled,BATS Exchange confirmed.
And Intel gained after the company said itredesigned the electronic switches on its chips, known as transistors, to allow it to make the switches cheaper and faster.
In M&A, Ralcorp Holdings surged to new highs after news ConAgra Foodsproposed to buy the Post brand cereals makerand other food products for $4.9 billion in cash. ConAgra, which owns Dennison’s and Swiss Miss brands as well as commercial food products, also gained.
And Varian Semiconductor Equipment skyrocketed after news Applied Materials is buying the smartphone and solar equipment maker for $63 a share in cash.
The M&A activity failed to lift the semiconductor sector, however, as more than 50 percent of semiconductor stocks slid. The iShares PHLX Semiconductor Sector Index Fund slipped.
Among the day's earnings, Kellogg fell after the cereal producer's earnings fell shy of expectations, while Time Warner slipped even after the entertainment conglomerate delivered better-than-expected results, thanks to a boost in advertising sales at the entertainment company's cable TV networks.
Meanwhile, Comcastand CBS traded higher after both media giants reported a rise in profit. CNBC is 51 percent owned by Comcast. Meanwhile, at least four brokerages raised their price targets on CBS.