NEW YORK ( TheStreet) -- Stocks sold off sharply in the final minutes of trading Wednesday as markets failed to look past weaker-than-expected private sector job growth in June compared with slightly better-than-expected regional manufacturing activity in the Chicago area.

After tumbling 268 points on Tuesday, the Dow Jones Industrial Average picked up where it left off, losing 96 points, or 1%, to 9774. The blue- chip average plunged 10.4% in the second quarter, marking its worst performance since the beginning of last year. The S&P 500 traded lower by 11 points, or 1% to 1031, and the Nasdaq fell 26 points, or 1.2%, at 2109.

Weaker-than-expected private sector job growth of 13,000 in June helped markets extend Tuesday's steep losses. On Tuesday, stocks plunged roughly 3% as a sharp downward revision to an economic indicator for China and a weak reading on U.S. consumer confidence in June renewed double-dip recession fears.

Wanda Drummond, chief operating operator of Training the Street, said that despite recent market volatility and concerns about private sector job growth, Wall Street firms are hiring and are expected to keep hiring at a swift pace into next year.

"Our numbers are definitely up," Drummond said, comparing demand at Training the Street, which helps bring new employees on board, particularly at the analyst and associate levels, with last year's figures. "Right now the population that we're looking at is the summer intern program, and next month, the number for the full-time employees. Those numbers are significantly higher as well so it definitely seems a little different than what the market is saying."

"We're also hearing that recruiting and hiring for next year is going to be up even higher with the same audience analysts and associates so it may be hitting Main Street a little slower but once you start getting this audience in for work, it's definitely going to have an impact on Main Street and a range of industries with all the services that they're going to need," Drummond said.

Earlier Wednesday, the European Central Bank said it will lend roughly $161 billion to banks for three months in a move to calm market fears ahead of the expiration of a larger 12-month loan on Thursday. The ECB said 171 institutions subscribed to the three-month refinancing operation.

Late in the day, Moody's also warned that it was looking at a possible downgrade to Spain.

Overseas, Hong Kong's Hang Seng slipped 0.6% lower Wednesday while Japan's Nikkei lost 2%. The FTSE in London gained 0.05%, and the DAX in Frankfurt added 0.2%.

On the financial regulation front, the Senate and House conference committee agreed to amend reform to remove a proposed $19 billion tax on the largest banks and end the Troubled Asset Relief Program three months early.

Also on Wednesday, markets were responding to Tropical Storm Alex's upgrade to hurricane status late Tuesday.

The Economy

Automatic Data Processing ( ADP) said the private sector added just 13,000 payrolls in June , compared with 57,000 in May. That addition was well below the 60,000 jobs that economists had been expecting.

Manufacturing activity in the Chicago region weakened a little in June, as expected. The Chicago Purchasing Manager's Index came in at 59.1, compared with May's level of 59.7. Wall Street had been looking for a June reading of 59 in June.

The Energy Information Administration said crude oil inventories declined by 2 million barrels in the week ended June 25, which was better than the drawdown of 1.2 million barrels that analysts had been expecting, but not as bullish as the 3.4 million-barrel decrease that the American Petroleum Institute reported late Tuesday.

Gasoline supplies gained 500,000 barrels, whereas analysts had been looking for a 400,000-barrel decline and distillates rose by 2.5 million barrels, which was larger than the increase of 1.3 million barrels that analysts estimated, according to a Platts survey.

Joseph Cassano, the former head of American International Group's ( AIG) Financial Products division, testified in front of the Financial Crisis Inquiry Commission. Cassano, who was at the center of AIG's catastrophic derivative wagers, was defending against the perception of his actions, according to a Bloomberg report. Gary Cohn, chief operating officer at Goldman Sachs ( AIG) was also scheduled field questions in front of the commission this afternoon.

Company News

Energy and industrial names performed better than most on the Dow. 3M ( MMM) was the sole blue chip component to finish in positive territory, though United Technologies ( UTX) and Pfizer ( PFE) lost far less ground than others. Alcoa ( AA), Walt Disney ( DIS) and Hewlett-Packard ( HPQ) applied the most pressure on the day.

Rio Tinto ( RTP) fell 4% after the company announced its decision to exercise all its Series A warrants in Ivanhoe Mines ( IVN), showing its continued dedication to a copper and gold project in Mongolia.

Shares of BP ( BP) improved 4.4% as merger and acquisition speculations continued to swirl.

Ford ( F) shares gained 2% after the automaker said it will reduce its debt by $4 billion.

Monsanto ( MON) missed analysts' earnings estimates for 80 cents a share by 10 cents and also fell short on sales with third-quarter revenue that was just below $3 billion. Wall Street had been expecting $3.2 billion. The stock lost 2.4% to $46.22.

Celgene ( CELG) is acquiring Abraxis BioScience ( ABII) for $2.9 billion in cash and stock to expand its cancer drug business.

Late Tuesday, Samsung unveiled its response to Apple's ( AAPL) new iPhone, Motorola's ( MOT) Droid X and HTC's Evo 4G: the Galaxy S .

Commodities and the Dollar

Crude oil for August delivery clipped 31 cents, to settle at $75.63 a barrel.

Elsewhere in commodity markets, the August gold contract settled 3.50 cents higher at $1,245.90 an ounce.

The dollar was trading lower against a basket of currencies, with the dollar index down by 0.1%.

Treasuries

The benchmark 10-year Treasury was up 3/32, decreasing the yield to 2.942%.

The two-year note fell 1/32, raising the yield to 0.613%. The 30-year bond was ahead 23/32, diluting the yield at 3.895%.

--Written by Melinda Peer and Sung Moss in New York.