Persistent worries about the slowing economy and when the Federal Reserve will start tapering its bond buying program had investors on edge again Wednesday.
U.S. stocks fell sharply, extending the previous day's slide, after major global markets also ended in the red.
The Dow Jones industrial average dropped 217 points, or 1.4%, ending below 15,000 for the first time since May 6. The S&P 500 also dropped 1.4% and the Nasdaq declined 1.3%. The day's losses were the worst in almost two months for the Dow and Nasdaq.
While the weak reading gave investors some hope that the Fed won't pare back its bond buying program anytime soon, nerves remain frayed and investors are taking caution.
The ADP report is a prelude to the U.S. government's closely watched monthly jobs report. That report is due before the bell Friday.
Marc Chandler, strategist for Brown Brothers Harriman, said in a client note that this month's jobs report is "particularly important," given all the rumblings about the Fed's next move.
Other economic news was mixed Wednesday. The ISM services sector expanded more than expected, with the index rising to 53.7 in May from 53.1 the previous month. But factory orders rose just 1%, less than the 1.6% forecast.
What's moving: The day's sell-off was broad-based, with all 10 S&P 500 sectors in the red.
A downer day for global markets:European markets tumbled after a second estimate of first quarter GDP confirmed that the eurozone economy contracted by 0.2%. London's FTSE 100 and the CAC 40 in Paris tanked about 2%, while Frankfurt's DAX fell slightly more than 1%.
Asian stocks also ended lower after investors were unimpressed by Japanese Prime Minister Shinzo Abe's unveiling of new "Abenomics" growth policies. The Nikkei index to tumble by nearly 4%, Hong Kong's Hang Seng lost 1% and the Shanghai Composite Index declined by 0.4%.