NEW YORK (CNN/Money) - U.S. stock markets sank Thursday, for a fourth straight session, with a series of terrorist attacks in Madrid exacerbating the recent concerns weighing on Wall Street, which has been suffering a setback all week.

The Dow Jones industrial average (down 168.51 to 10128.38, Charts) lost 1.6 percent, the Standard & Poor's 500 (down 17.11 to 1106.78, Charts) index lost 1.5 percent, while the Nasdaq composite (down 20.26 to 1943.89, Charts) lost 1 percent.

Since the close last Friday, the Dow has lost 4.4 percent, the S&P 500 4.3 percent and the Nasdaq is down just over 5 percent.

This four-session selloff has marked the first big move one way or the other for the market after 7 weeks of fairly rangebound trading, and has pushed the major indexes into the negative for the year. Year-to-date, the Dow is down 3.1 percent, the S&P 500 is down 4.6 percent and the Nasdaq is down just under 3 percent.

The market is vulnerable to more losses in weeks ahead, traders said, due to the recent slower pace of economic growth and continued insecurity about the presidential election and how its outcome might affect the Bush administration's tax cuts.

"Historical patterns we watch are suggesting that this pullback is not the beginning of the end, but merely an overdue consolidation, likely to run several months," Barry Ritholtz, a market analyst at Maxim Group, wrote in an afternoon note to clients.

Stocks had been mixed Thursday morning following some weak economic news and the initial news of terrorist bombings in Madrid. The market recovered at midday and popped higher, in particular the Nasdaq after National Semiconductor issued strong earnings and an upbeat outlook.

But the market began to deteriorate again in late afternoon, finally plunging in the last 45 minutes of trade following news reports that terrorist group Al Qaeda claimed responsibility for the bombings.

A set of coordinated bomb attacks on Madrid's rail system during the morning rush left at least 192 dead and at least 1,400 injured, days before the country's general election Sunday.

Spanish officials initially said the attack was likely the work of the Basque separatist organization ETA and that possibility remained, with investigations ongoing.

But late Thursday afternoon, Spain's interior minister said a new line of investigation has been opened after police found a van with detonators and Arabic-language tapes of verses from the Koran near Madrid. A London-based Arabic newspaper said it received a letter from a group related to Al Qaeda claiming responsibility for the attack.

After the close of trade, business software maker Oracle (ORCL: Research, Estimates) reported earnings of 12 cents per share versus 11 cents per share a year ago, in line with analysts' estimates. The company is in the midst of a hostile takeover bid for PeopleSoft (PSFT: down $0.28 to $18.91, Research, Estimates) that has been challenged by the Department of Justice.

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Friday brings reports on the current account deficit and business inventories before the opening bell and the University of Michigan's read on consumer confidence just after the open.

"The confidence number is tomorrow's most significant report, but it's not extremely important," said Peter Green, a market analyst at MKM Partners. "People are still refinancing and have money in their pockets, even with the job market struggling."

The preliminary read on consumer confidence for March is thought to have risen to 95.0 from 94.4 last month, according to Briefing.com estimates.

The selling was fairly broad-based, with 29 out of 30 Dow components tumbling on the session, most of them by 1 percent or more. IBM (IBM: down $1.85 to $91.21, Research, Estimates), Procter & Gamble (PG: down $1.58 to $103.95, Research, Estimates), United Technologies (UTX: down $1.47 to $85.63, Research, Estimates) and Coca-Cola (KO: down $1.47 to $48.18, Research, Estimates) were among the biggest decliners.

An early afternoon report from National Semiconductor (NSM: up $0.88 to $39.08, Research, Estimates) seemed to reassure technology investors still a little edgy after Intel's less-than-bullish outlook last week, temporarily pushing the market higher. But those gains quickly evaporated on the heels of the broader concerns.

National Semiconductor (NSM: up $0.88 to $39.08, Research, Estimates) reported fiscal third-quarter earnings of 47 cents per share, 6 cents more than what analysts surveyed by Reuters were expecting and up from a year earlier. The company said that better-than-expected bookings in the third quarter created more backlog and good momentum for the fiscal fourth-quarter. It also said it sees improvements in the fourth quarter, and raised its forth-quarter revenue forecast to a range higher than what analysts are currently calling for.

National Semi shares rose 2.3 percent, but the impact of the news on the Nasdaq was short lived.

Among other movers in the market, Nortel Networks (NT: down $0.51 to $6.37, Research, Estimates) fell 7.4 percent, recovering from a steeper decline in the morning after the company said it would delay filing its 2003 annual report to the U.S. Securities and Exchange Commission, due to the fact that it might have to restate the results because of its previously announced accounting review.

Educational toy maker LeapFrog Enterprises (LF: down $6.40 to $19.60, Research, Estimates) sank 24.6 percent after late Wednesday it forecast first-quarter sales that were sharply below analysts' projections and said its loss in the quarter would be much bigger than expected.

The morning's economic reports were mixed. Retail sales in February rose 0.6 percent after rising a revised 0.2 percent in January. But sales excluding autos were unchanged after rising a revised 1.2 percent in January -- a number that was disappointing to economists, who had expected sales ex-autos to rise 0.5 percent.

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The number of Americans filing new claims for unemployment fell last week to 341,000 from an upwardly revised 347,000 the previous week.

Market breadth was negative. On the New York Stock Exchange, where 1.87 billion shares traded, losers outnumbered gainers by nearly three to one. On the Nasdaq, decliners beat advancers by twelve to five as 2.17 billion shares changed hands.

Bond prices rose. The 10-year note added 9/32 of a point in price, pushing its yield down to 3.69 percent from 3.72 percent late Wednesday. Bond prices and yields move in opposite directions. The dollar slipped versus the yen and euro.

Among commodities markets, NYMEX light sweet crude oil futures rose 68 cents to settle at $36.78 a barrel. COMEX gold rose 70 cents to settle at $401 an ounce.