It was the selloff that just wouldn't end.

After a rare trading session that extended past 4 p.m. EDT due to technical problems, the Dow suffered its worst day in more than two months on Thursday amid economic fears that were bolstered by a disappointing jobs report. 

Today's Markets

The Dow Jones Industrial Average lost 223.32 points, or 2.63%, to 8280.74, the Standard & Poor's 500 sank 26.91 points, or 2.91%, to 896.42 and the Nasdaq Composite sank 49.20 points, or 2.67%, to 1796.52. The consumer-friendly FOX 50 dropped 17.25 points, or 2.52%, to 666.76.

Thursday's selloff, which was marked by exceedingly low volume ahead of the holiday weekend, sent Wall Street to its first three-week slump since March. The markets were slammed by crumbling commodities along with the new Labor Department report, which revealed that nearly half a million Americans lost their jobs in June, sending the unemployment rate to new 25-year highs.

“I think people are pretty nervous about those [jobs] numbers,” NYSE trader Doreen Mogavero told FOX Business. “There seems to be somewhat of a disconnect between the markets and reality. I think that might be reflected today.”

The bulls on Wall Street were clearly disappointed the latest economic data has failed to provide concrete evidence that a recovery is in the cards.

“This is a market that needs more than just a decrease in the magnitude of bad news. We need more than less-bad. We need good,” said Art Hogan, chief market strategist at Jefferies & Co. “I think we’re going to have a choppy road for a while.”

Still, it’s hard to put too much credence into Thursday’s plunge as it came on ridiculously low volume ahead of the holiday weekend.

“It would appear a lot of investors and portfolio managers are on Lunesta at this point,” NYSE trader Jason Weisberg of Seaport Securities joked to FOX Business, referring to Sepracor’s sleep medicine.

Despite that lack of volume, technical problems forced the New York Stock Exchange to close at 4:15 p.m. EDT, instead of the usual 4 p.m. (Click here to read more on the NSYE's rare "extra inning" of trading.)

The Dow, which took its steepest plunge since April 20, was led lower by Travelers (TRV) and Alcoa (AA). Defensive stocks like Coca-Cola (KO) and Wal-Mart (WMT) saw more modest losses. The blue-chip index ended at its lowest level since May 22. 

The Nasdaq 100 was led lower by a combination of tech stocks like Electronic Arts (ERTS) and Adobe (ADBE) and slumping consumer names like Expedia (EXPE) and Sears (SHLD). 

Jobs Report Spooks Stocks

The weakness on Wall Street comes after the markets started off the third quarter on a positive note Wednesday. While the S&P 500 last quarter enjoyed its best period since 1998, stocks have hit a brick wall in recent weeks as the markets wait for improving economic gauges.

Those hopes were dashed Thursday by the jobs report, which showed that the U.S. lost 467,000 jobs in June, well above May's 322,000 job losses and significantly worse than the 350,000 jobs economists had predicted were shed. The acceleration in job cuts last month pushed the  unemployment rate from 9.4% in May to 9.5% -- the highest level since August 1983.

Still, the labor market has improved from earlier this year when the U.S. lost more than 700,000 jobs a month. 

“I think people will step back at some point and see it’s not the worst-case scenario. You really have to look at the trend. Are we moving in the right direction? I think so,” said Hogan.

The bulls on Wall Street had been hoping for a relatively tame report that could have showed May's figures weren't a one-time blip on the economic radar. Instead, Thursday's jobs report, coupled with weaker-than-expected reports on private payrolls and manufacturing released earlier this week, raise more questions about the timing and strength of a potential second-half recovery for the economy. 

There were some bright spots in Thursday's data as the government said initial jobless claims tumbled by 16,000 last week to 614,000, beating expectations. The Labor Department also said claims filed by those out of work for more than one week declined by 53,000 to 6.7 million. 

At the same time, the markets were under heavy pressure from the commodities complex, which was crippled by the dollar's 1% surge against the euro and the new economic data. 

Ending in the red for the third-straight day, crude fell $2.58 a barrel, or 3.72%, to $66.73 -- the lowest level since June 3.  The weaker oil prices sent the energy sector down 4% and individual stocks like National Oilwell Varco (NOV) and Massey Energy (MEE) down even further. 

Thursday was the last trading day of the week for U.S. markets, which will be closed Friday in observance of the Fourth of July.

Data Dump

The Commerce Department said factory orders in May grew by an in-line 1.2%, the strongest showing since June 2008. 

Corporate Movers

Citigroup (C) and General Electric (GE) considered merging their credit-card businesses earlier this year but talks fell apart amid disagreements on pricing, the New York Post reported. The talks centered on Citi unloading its credit-card unit to GE or the two companies combining them into a joint venture, the paper reported. 

Elan (ELN) rose sharply after Johnson & Johnson (JNJ) took an 18.4% stake in the Irish drug maker. The deal will give J&J access to much of Elan's Alzheimer's research in exchange for a $1 billion investment.

Exelon (EXC) boosted its hostile bid for power producer NRG Energy (NRG) by 12% to $7.45 billion. Exelon said it is confident it will secure financing for the offer, which it said is its “final” one.

Sepracor (SEPR) lost almost one-fifth of its market value a day after the biotech company disclosed negative developments for a pair of its drugs. Its depression drug failed a clinical study and regulators shut down studies on its Lunesta insomnia pill. 

TiVo (TIVO) fell sharply after the company was dealt a setback by an appeals court that will allow Dish Network’s (DISH) customers to continue to use their digital video recorders. The ruling means the two companies four-year legal battle over the technology will live on.

Global Markets

In Europe, where the European Central Bank left rates unchanged, stocks plunged even further. London's FTSE 100 slipped 2.45% to 4234.27, France's CAC 40 fell 3.13% to 3116.41 and Germany's DAX sank 3.81% to 4718.49. 

In Asia, Japan's Nikkei 225 fell 0.64% to 9876.15, Hong Kong's Hang Seng dropped 1.09% to 18178.05 and China's Shanghai Composite gained 1.73% to 3060.25.