NEW YORK - The seventh year of the U.S. bull market is off to a rocky start.

U.S. stocks fell sharply Tuesday, wiping out this year's gains for the Dow Jones industrial average and the Standard & Poor's 500 index. Investors are nervous about the likelihood of the first increase in U.S. interest rates in nine years and a plunge in the value of the euro.

Investors dumped stocks from the start of trading and the selling accelerated as the day wore on. All 10 industry sectors in the S&P 500 closed lower.

The Dow sank 332.78 points, or 1.9 percent, to 17,662.94. The S&P 500 fell 35.27 points, or 1.7 percent, to end at 2,044.16. The Nasdaq composite lost 82.64 points, or 1.7 percent, to 4,859.79. The Nasdaq is still up nearly 3 percent so far this year.

The prospect of higher interest rates is unnerving investors. The Fed's ultra-low-rate policy, in place since 2008, has allowed companies to borrow cheaply and has made stocks more appealing relative to bonds by pushing bond yields lower. The S&P 500 has tripled since hitting a recession low on March 9, 2009.

On Tuesday, the euro dropped 1.3 percent against the dollar to a 12-year low of $1.07.

Talk of U.S. rate hikes comes as central banks in other major countries are trying to jolt their economies to faster growth by lowering borrowing costs. On Monday, the European Central Bank began buying bonds to lower long-term interest rates in a program called quantitative easing, or QE. The central bank in Japan has a similar effort underway. The U.S. Fed ended its bond purchases last year.

When central banks move in opposite directions, it can cause disruptions in the global flow of capital into bonds and currencies and, in turn, stocks. In the U.S. bond market, the yield on the 10-year Treasury note fell to 2.13 percent from 2.19 percent late Monday.

The price of oil fell sharply on further indications of rising global supplies as Iraq production appeared to be returning to market after weather-related disruptions. Benchmark U.S. crude fell $1.71 to close at $48.29 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $2.14 to close at $56.39 in London.

Precious and industrial metals futures closed lower. Gold lost $6.40 to $1,160.10 an ounce, silver fell 14 cents to $15.63 an ounce, and copper fell five cents to $2.62 a pound.