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Stocks sunk sharply on Wednesday afternoon, closing out the worst day for the Dow Jones Industrial Average and the S&P 500 since August. The Dow fell 279.12 points or 2.2% while the Nasdaq fell 65.84 points or 2.3 percent. According to The New York Times, the markets slumped on news of troubling economic reports. "The monthly report from ADP Employer Services, the payroll processing firm, said that private employers added 38,000 jobs in May, lower than expectations and the smallest increase since September 2010," writes The Times. "Economists said that the figure in the ADP survey, far less than the 175,000 jobs that had been forecast, could have been a reflection of severe storms in many parts of the country that month, while automobile manufacturers have temporarily laid off workers in response to a disruption in supply chains." Joe Weisenthal at Business Insider has some other theories:

On the corporate side of things, there were a few things of note. During the mid-day there was a rumor that Microsoft was going to buy Nokia's phone business for $19 billion, and that sent the stock sliding. Nokia itself briefly rallied, but then went back to getting killed. Luxury high-flyer Tiffany's fell hard after a Deutsche downgrade. Big automakers (Ford, GM, Toyota) got smashed in the face after reporting bad car sales for May. Dow blue chips like Bank of America and Caterpillar saw their stocks dive. All around, bad times. Oh, and the CEO of Juniper issued an earnings warning.

Besides the ADP report, Hibah Yousuf at CNN Money points to Institute for Supply Management's manufacturing index, which fell to 53.5, lower than what economists had forecast. Additionally, "during the last hour of trading, the slide in stocks got steeper as concerns about Europe's debt problems resurfaced. Moody's cut Greece's local and foreign bond rating by three notches to Caa1, which put the debt-ridden country's debt even further in junk territory."

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