Nasdaq nosedives 1.6%, WTI oil tops $60 a barrel

Stocks tumbled Tuesday and oil prices climbed back above $60 a barrel as the U.S. trade deficit jumped to a 6-year high, sparking concern about economic growth.

The drop halted a two-session winning streak for the stock market, partly because economists worried that the sharp jump in the trade gap could potentially force a revision of first-quarter gross domestic product into negative territory.

The Dow Jones industrial average lost 0.8% -- 142 points -- to close at 17,928.20. The Standard & Poor's 500 index ended down 1.2%. The Nasdaq composite took a 1.6% pounding, ending below the 5000 level, off 78 points to 4939.33. Apple (APPL), which lost 2.3%, was one of the the biggest losers of the Dow, and also took a heavy toll on the Nasdaq and S&P indexes.

The government reported Tuesday that the U.S. trade deficit rose in March to $51.4 billion as a big jump in imports overpowered a modest increase in exports.

West Texas intermediate crude jumped $1.83 to $60.76 on the New York Mercantile Exchange, the first time the U.S. benchmark for oil has settled above $60 this year, amid worries the global glut in crude might be nearing an end.

As harsh as Tuesday's stock selloff might have seemed, all three major U.S. market measures are within easy striking distance of record highs. The S&P is just 1.3% below its record less than two weeks ago. The Dow is 2.0% off its high back in early March. And the Nasdaq is down 3.0% from its record close on April 24.

Part of the reason for that strength is that first-quarter earnings have not been nearly as bad as analysts had feared. Nearly 80% of S&P 500 companies have reported first-quarter earnings, and it's looking like year-over-year growth will be 1.8%, says Thomson Reuters I/B/E/S. In early April analysts were expecting a nearly 3% drop.

There is one troubling thing in first-quarter reports, says Tim Dreiling of U.S. Bank Wealth Management. More more than half of every 10 companies in the S&P 500 have fallen short of analysts' sales targets. "That's what is concerning," Dreiling said.

Follow David Carrig on Twitter: @david_carrig