The sell-off on Wall Street continued on Tuesday, with the blue-chip Dow suffering its first back-to-back triple-digit declines since November, as concerns over European debt problems resurfaced amid rising borrowing costs in Spain and Italy.
The Dow Jones industrial average lost 213.66 points, or 1.65 percent, to 12,715.93, its lowest level since February 2.
The Standard & Poor's 500 dropped 23.61 points, or 1.71 percent, to 1,358.59, which extended its losses to the fifth session.
The Nasdaq Composite Index tumbled 55.86 points, or 1.83 percent, to 2,991.22. Tuesday's decline came after major indexes logged four consecutive losing sessions as job data in March was worse than expected.
Adding to the negative tone, yields on Spain's 10-year bonds hovered just under 6 percent, the highest level in more than three months, even as the government were pushing through much stricter austerity measures.
Meanwhile, the yields in Italy rose as well, reminding investors that the problems in Europe were far from over.
Investors were also cautious ahead of a new earnings season, which is generally expected to be flat after nine consecutive quarters of earnings growth.
However, shares of Alcoa surged in after-hour trading after the aluminum producer announced better-than-expected earnings and revenues, which may give investors some confidence in the next day.