That report helped knock stocks down at the open, and with Europe to worry about, they sank all day. The S&P finished down 23.61 points, its worst one-day decline this year, at 1,358.59.
The Nasdaq composite index, which eked out a gain in one of the past four days, ended down 55.86 points, its worst performance this year, at 2,991.22. It closed below 3,000 for the first time in more than a month.
The Dow's 8 percent gain through the first quarter has been shaved to 4 percent. The S&P's gain of 12 percent has been cut to 8 percent. And the Nasdaq's run of almost 20 percent is now just 15.
Last year, the Dow's longest losing streak was an eight-day, 858-point plunge in July and August, with Congress bickering over the government debt limit and just before the S&P ratings agency downgraded the U.S.
On Tuesday, consumer discretionary stocks, which include travel companies, clothing stores and cable companies, fell 2.4 percent as a group, the worst-performing segment of the market.
Financial stocks fell almost as much, and even utilities and health care stocks, which are more dependable in times of economic uncertainty, were down more than 1 percent each.
The worst-performing stock in the Dow was Bank of America, which tends to take a hit when concerns about Europe grow stronger. Bank of America was down 4.4 percent.
Trading was the most active since March 16, 4.6 billion shares.
One big factor in the sell-off is fear that growth is slowing in the world's biggest economies. Recent economic reports from the United States and China have come in far below investors' expectations.
The March jobs report showed a gain of 120,000, about half the monthly gain from December through February. And an earlier report on Americans' incomes showed that when adjusted for inflation, they dipped slightly in February for the second straight month. Without more earnings, consumer spending will likely be constrained.
Investors are pricing in slower growth in the United States, said Neil Dutta, an economist at Bank of America Merrill Lynch. He predicts the S&P will end the year at about 1,400, only about 3 percent higher than where it finished Tuesday.
For now, he said, "the likelihood is that the sell-off is probably not done."
The low expectations for earnings could be a blessing in disguise, though. Companies may have an easier time beating them, which can drive up their stock price, at least temporarily.
"CEOs have done a very good job of setting expectations low," said JJ Kinahan, chief derivatives strategist for TD Ameritrade in Chicago.
Analysts have also worried that high gasoline prices could hurt the economic recovery. The price of oil fell almost to $101 a barrel Tuesday, but that was because traders are betting that a weak U.S. economy will keep demand low.
That's down from nearly $110 last month, but still up significantly from about $75 in October. The buildup has been partly because of tension over Iran's nuclear program and the oil embargoes that have ensued.
Iran, which has already cut off oil shipments to France and Britain, declared Tuesday that it would extend the embargo to Greece, a pre-emptive strike against European countries that planned to stop buying from Iran. Talks on Iran's nuclear program are scheduled for Saturday.
On Tuesday, the dollar and U.S. Treasury prices rose as investors shifted money into lower-risk investments. The yield on the benchmark 10-year Treasury note fell for the fifth straight day, dropping to 1.99 percent from 2.04 percent Monday.
Among stocks making big moves:
— Supervalu Inc., the grocery chain that owns Albertsons and Jewel-Osco, climbed 15 percent. The company reported a quarterly loss but outlined turnaround plans that include closing stores and slashing jobs.
— Best Buy fell almost 6 percent after announcing that its chief executive had resigned without a permanent successor. The electronics giant is struggling for market share in a retail world that's been shaken up by online companies like Amazon.
AP Economics Writer Christopher S. Rugaber contributed to this report from Washington.