Stocks plunged Thursday as investors grew concerned about the country's economic slowdown.

The Dow Jones Industrial dropped more than 300 points in midday trading, nearly erasing earlier gains for the year.

Investors are reacting to signs that the job market remains stagnant.

"We are continuing to be bombarded by worries about the global economy," said Bill Stone, chief investment strategist at PNC Financial.

Manufacturing, consumer spending and hiring by private companies are below levels that are consistent with a healthy economy.

Oil fell 4 percent to $88 a barrel on worries that demand will fall because of the slowing economy. Oil had traded over $100 as recently as June 9.

In addition, the number of first-time unemployment benefits applications only slightly improved last week.

The monthly unemployment report will release Friday and is expect to show little signs of progress.