Wall Street suffered another triple-digit setback Tuesday as the Dow settled at its lowest level since late April amid the fifth-straight down day for oil and continued pessimism about a potential economic recovery.

Today’s Markets

The Dow Jones Industrial Average lost 161.27 points, or 1.94%, to 8163.60, the Standard & Poor's 500 sank 17.69 points, or 1.97%, to 881.03 and the Nasdaq Composite sank 41.23 points, or 2.31%, to 1746.17. The consumer-friendly FOX 50 dropped 13.01 points, or 1.95%, to 655.41.

While the selloff came on light volume, it means the Dow has now lost more than 340 points in just three trading sessions. The losses and recent negativity on Wall Street bolster the bears' argument that Wall Street's recent run was overdone.

“Reality seems to be settling in. The economy doesn’t seem to have all the traction that people were hoping it had,” NSYE trader Ted Weisberg of Seaport Securities told FOX Business. “Certainly the market is, at the moment, sending us a negative message.”

Marc Pado, U.S. market strategist at Cantor Fitzgerald, echoed that sentiment, saying: “Obviously the jobs number last week suggested the economy may not be as much on the road to recovery as we thought. I think the market was a little bit ahead of itself.”

At the same time, Wall Street is understandably jittery as aluminum titan Alcoa (AA) is set to kick off earnings season Wednesday. Standard & Poor’s expects seven of the S&P 500’s 10 sectors will report year-over-year declines in profits. 

“We know that the second-quarter [earnings reports] are going to be bad,” said Pado. “There's very little reason to buy heading into these numbers. Nothing good is going to come from it.”

The Dow, which crumbled to its worst level since April 28, was led lower Tuesday by Caterpillar (CAT), General Electric (GE) and DuPont (DD). On the other hand, Alcoa and JPMorgan Chase (JPM) were the biggest advancers.

Closing in the red for the third-straight day, the Nasdaq Composite tumbled more than 2% as tech stocks like Amazon.com (AMZN) and Google (GOOG) fell sharply.

Without any significant earnings or economic reports to take their cues from, the markets continue to closely mirror the commodities complex, where crude oil settled at its lowest level since May 26. While a positive for cash-strapped consumers, the lower oil prices sent shares of energy companies like Valero (VLO) and Schlumberger (SLB) sharply lower.

Oil has plunged 12% over the past five sessions amid a stronger dollar and economic fears, its worst slump since February. Crude settled down $1.12 per barrel, or 1.75%, to $62.93 on Tuesday.

“It’s a money-flow issue. You had speculative money that came into the marketplaces, particularly in the commodities, expecting a recovery in the world that’s not taking place as fast as those speculators wanted to see. So you’re seeing the money come out of that game,” NYSE trader Ben Willis of VDM Institutional Brokerage told FOX Business.

Wall Street wasn't helped Tuesday by uncertainty fueled by new talk of a second round of economic stimulus. Just six months after the $787 billion stimulus package was signed, Laura Tyson, a member of President Barack Obama's Economic Advisory Panel, said the U.S. economy may need a stimulus part II. 

While Tyson stressed she wasn’t speaking on behalf of the White House, her comments come as the unemployment rate nears 10% and hours before Obama told FOX News he won't rule out more stimulus. House Majority Leader Steny Hoyer also told reporters that leaders need to be open to the possibility of a second stimulus package.

Stocks received just a fleeting bounce from a mixed auction of $35 billion of three-year notes Tuesday afternoon that saw solid demand but above-average yield. The markets will likely be more focused on Tuesday's 10-year bond auction for signs demand is buckling under record debt issuance.

It wasn't all down arrows on Wall Street as health-care stocks like Aetna (AET) and United Health (UNH) soared after Rahm Emanuel, Obama’s chief of staff, told The Wall Street Journal the White House isn't married to the idea of a government-run health-care plan. Then again, Obama released a statement Tuesday reaffirming his support for the so-called public option.

Corporate Movers

Lear filed for Chapter 11 bankruptcy protection Tuesday, making the company the largest auto parts supplier to succumb to the depressed auto market. The move comes a day after Lear reached a deal to convert $3.6 billion of its debt.

Discover Financial (DFS) saw its shares dive after the credit card company unveiled plans to sell $500 million of common equity to help repay its $1.2 billion of TARP cash.

AT&T (T) and Verizon (VZ) were under pressure after the Journal reported the Justice Department has begun looking into whether large U.S. telecoms are abusing their market power. The review, which is in its early stages, isn’t a formal investigation of any specific company and it isn’t clear if it ever will be, the paper reported.

Boeing (BA) unveiled a $580 million deal to acquire a Vought Aircraft’s South Carolina plant where the fuselage of the aerospace giant’s 787 Dreamliner is built. Last week Boeing disclosed more delays for the new aircraft.

Intel (INTC) sank lower even after the tech giant was upgraded to “buy” from “neutral” by Bank of America-Merrill Lynch. The analysts cited increased projections for demand and lean supply chain inventories. LSI (LSI), Marvell Technology (MRVL), Maxim Integrated (MXIM) and National Semiconductor (NSM) were also upgraded by BofA.

Weyerhaeuser (WY) slashed its quarterly dividend by 80% in an effort to enhance liquidity and provide greater financial flexibility. The paper and forest products company also backed its second-quarter guidance even as it acknowledged the economic outlook continues to be “challenged and uncertain.”

Callaway Golf (ELY) rose sharply after Lazard started coverage of the golf club maker with a “buy” rating and a $12 price target.

Global Markets

European markets ended in the red for a second-straight day. London's FTSE 100 dropped 0.19% to 4187, France's CAC 40 lost 1.09% to 3048.57 and Germany's DAX tumbled 1.15% to 4598.19.

In Asia, Japan's Nikkei 225 fell 0.34% to 9647.79, Hong Kong's Hang Seng slipped 0.65% to 17862.27 and China's Shanghai Composite sank 1.13% to 3089.45.