Stocks slid more than 1 percent on Thursday and the S&P 500 fell through a key technical level amid global economic worries, suggesting more losses may be on the way.

Nearly seven stocks fell for every one that rose on both the New York Stock Exchange and the Nasdaq, in an indicator of the depth of the negative sentiment driving the sell-off.

A ratings agency's downgrade of Spain, an unexpected swing to a trade deficit in China and jobless and other data the United States heightened global growth worries.

The market just needed a catalyst. It was so extended. And to me, I see the China trade deficit as a catalyst, I see the Spain downgrade as a catalyst, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

Analysts have been calling for a correction in the market after its big run up since early September. The S&P 500 is up roughly 25 percent since then.

The benchmark S&P 500 index fell below its 50-day moving average, an indication of medium-term momentum for the market, for the first time since November.

Mendelsohn said he's eyeing 1,294.26 on the S&P 500 as critical support.

Once we take that out, I see 1,250 in my sights pretty easily, so I think this is the beginning of something severe, he said.

Energy shares represented the biggest drag on the S&P 500, as oil prices pulled back from recent highs. The S&P energy index <.GSPE> fell 2.8 percent, a reversal from its recent rally on skyrocketing oil prices.

The Dow Jones industrial average <.DJI> was down 175.16 points, or 1.43 percent, at 12,037.93. The Standard & Poor's 500 Index <.SPX> was down 19.31 points, or 1.46 percent, at 1,300.71. The Nasdaq Composite Index <.IXIC> was down 43.06 points, or 1.57 percent, at 2,708.66.

An index of semiconductors <.SOX>, among the market's weaker areas this week, lost 1.6 percent.

Apple Inc , down 1.8 percent at $346.18, was the biggest drag on the Nasdaq 100 <.NDX>. Apple's stock also has climbed steadily in recent weeks, with a gain of 7.3 percent for the year. The company's new iPad tablet computer will go on sale early on Friday.

Volume totaled 4.4 billion near midday and looked on track to close at an above-average level.

Brent oil futures prices declined, even as Libyan leader Muammar Gaddafi carried counterattacks deeper into the insurgent heartland. The turmoil has driven oil prices up sharply in recent weeks.

Two areas hit this week are energy and semis, and these are two of the best areas so far this year, said Eric Marshall, director of Research, Hodges Capital Management, Dallas, Texas. That's the normal consolidation you would expect after the big run we've had.

The energy index is up 9 percent since the start of the year, while the semi index is up 3.7 percent. The S&P 500 is up 3.4 percent since the end of December.

Adding to the negative tone, U.S. government data showed initial claims for state unemployment benefits increased 26,000 to a seasonally adjusted 397,000 and the trade deficit widened much more than expected in January to $46.3 billion.

Moody's one-notch downgrade of Spain, based on the costs of restructuring its banks, came with a warning that further cuts were possible. The agency downgraded Greece's debt earlier this week.

China swung to an unexpected trade deficit in February of $7.3 billion, its largest in seven years, but economists said the drop was likely temporary.

The CBOE Volatility Index or VIX <.VIX>, Wall Street's favorite gauge of investor fear, was up 3.6 percent at 20.95 in late-morning trading.

(Reporting by Caroline Valetkevitch; Additional reporting by Charles Mikolajczak and Doris Frankel; Editing by Jan Paschal)