NEW YORK (TheStreet) -- Economists knew the first quarter was bad but not this bad. Stocks sold off on Tuesday after weak trade data prompted worries that revised macro numbers could show the U.S. economy contracted in the first quarter.
The S&P 500 dropped 1.2% while the Dow Jones Industrial Average declined 0.79% and the Nasdaq tumbled 1.6%.
The U.S. trade deficit jumped to $51.4 billion in March, hitting a six-year high and far wider than the $41.7 billion some had estimated. Imports increased after the nine-month slowdown at West Coast ports caused a backlog of cargo that is now being cleared.
"The revisions to the trade data will be enough to reduce the real GDP growth rate in Q1 by 0.5 percentage point," Wells Fargo's Jay H. Bryson and Tim Quinlan wrote in a note. "With the preliminary estimate showing that real GDP edged up at an annualized rate of only 0.2% in Q1, revised GDP data could very well show a slightly negative growth rate in the first quarter."
Salesforce.com (CRM) shares were briefly halted after volatile trading. The price of the cloud-computing company's shares jumped 1.7%, to $72.78, after the pause was lifted. Shares have been on the move over the past week on reports the company has been approached by an unnamed potential acquirer. Bloomberg reported Microsoft (MSFT) is evaluating a possible bid for Salesforce.
Crude oil jumped above $60 a barrel for the first time since Dec. 11, 2014. Commodity prices were higher after protesters shut down a Libyan port, temporarily halting exports. Oil prices have plummeted since last summer as markets faced oversupply and weakening demand. West Texas Intermediate crude was up 2.5% to $60.40 a barrel.
"Protests have stopped crude flows to an eastern Libyan port, while the expectation of peaking U.S. production and higher demand for crude to refine into products as we move towards driving season has the bulls on the charge," said Schneider Electric commodity analyst Matt Smith.
The ISM services index climbed to 57.8 in April from 56.5 in March. Economists had expected the reading to remain unchanged month to month. The employment index increased to 56.7 from 56.6, a promising sign ahead of Friday's U.S. jobs report.
Biotech stocks including Gilead Sciences (GILD), Alexion Pharmaceuticals (ALXN), and Amgen (AMGN) were all lower, while the Health Care SPDR ETF (XLV) slid 1.3%. Apple (AAPL), Baidu (BIDU), Intel (INTC) and Google (GOOGL) dropped and the Technology SPDR ETF (XLK) fell 1.5%.
Netflix (NFLX) has urged the Federal Communications Commission to reject the pending merger of AT&T (T) and DirecTV (DTV) unless competitive concerns are addressed. The $48 billion merger would see the second-largest U.S. wireless carrier and the largest U.S. satellite-TV company combine.
Netflix was 2% higher after Bank of America upgraded shares to buy from underperform. Analysts said a strong portfolio of original content will fuel an enormous international opportunity.
Walt Disney (DIS) gave up earlier gains. The world's largest entertainment company reported second-quarter earnings of $1.23 a share, a rise from $1.11 a year earlier. Revenue surged 7% to $12.46 billion. The better-than-expected results stemmed from a 24% increase in operating income at Walt Disney Parks due to higher ticket prices.
Sprint (S) was 3.1% lower after missing earnings estimates in its recent quarter. The telecom company said it had added 1.2 million net new customers over the quarter, its biggest increase in almost three years.
UBS (UBS) added 5% after reporting first-quarter profit nearly double a year earlier. The Swiss bank earned 1.98 billion Swiss francs ($2.12 billion), an increase from 1.05 billion francs a year earlier.
Kellogg (K) beat on the top- and bottom-line, though revenue sank 4.8% over the quarter. Breakfast food sales fell 2.9%, while snack revenue dropped 1.2%. Shares were down 1.5%.
Estee Lauder (EL) shares jumped after the cosmetic company reported a 30% increase in quarterly profit. Sales climbed just 1% as currency exchange proved a challenge.
Bloomin' Brands (BLMN) fell after lowering its revenue guidance for 2015. The owner of Outback Steakhouse said foreign exchange would undermine top-line growth this year.
Chicago Federal Reserve President Charles Evans is toeing the Fed's party line that weakness in the first quarter was merely transitory. In a speech on Monday, Evans said the risks associated with hiking interest rates too soon outweigh those of delaying any move until 2016.
"I likely will not feel confident enough to begin to raise rates until early next year," he said in remarks to the Columbus Economic Development Board.