Stocks extended losses on Tuesday with the S&P 500 breaking below a key support level before the start of first-quarter earnings season.

The S&P 500 fell more than 1 percent in midday trade to slide below its 50-day moving average of 1,372.30, an area viewed as the support level that will make or break the current uptrend.

The market's losses were broad, with the industrial and materials sectors representing the stocks suffering the biggest declines.

The CBOE Volatility Index or VIX <.VIX>, Wall Street's fear gauge, jumped 8.3 percent to 20.39, and was up for the eighth straight day, its longest streak of consecutive gains in nearly nine years. At its session high, the VIX earlier touched 20.98 - up 11.5 percent for the day.

Apple shares dropped quickly from hitting a new high of $644 per share to briefly top a $600 billion market capitalization. At midday, the stock was down 0.3 percent at $634.51.

The bar has been set low for the earnings season so I think earnings will be a catalyst for the market to move higher. The recent decline is just digesting the uninterrupted rally we've had, said JJ Kinahan, chief derivatives strategist for TD Ameritrade in Chicago.

The Dow Jones industrial average <.DJI> was down 168.21 points, or 1.30 percent, at 12,760.44. The Standard & Poor's 500 Index <.SPX> was down 19.44 points, or 1.41 percent, at 1,362.76. The Nasdaq Composite Index <.IXIC> was down 45.80 points, or 1.50 percent, at 3,001.28.

The Standard & Poor's 500 Index is still up 8.5 percent so far this year - compared with its gain of 12 percent at the end of the first quarter. But the benchmark index has fallen 2.6 percent in the past four sessions as investors questioned the economy's strength and the U.S. Federal Reserve's resolve to keep the easy money flooding into the market.

Some analysts view the pullback as a buying opportunity, while others see it as the start of a long-awaited correction.

Friday's soft U.S. payrolls report added to the U.S. stock market's recent losses that were sparked by last Tuesday's minutes from the Fed's March policy meeting. The Fed's minutes were interpreted as showing the central bank was less than keen to launch more stimulus.

A Reuters poll on Monday showed most major Wall Street banks expect anemic growth in the U.S. job market and a struggling economic recovery to force the Fed to undertake another round of monetary stimulus.

Supervalu Inc shares jumped 10.2 percent to $5.86 after the third-largest U.S. supermarket operator reported better-than-expected earnings and issued a full-year profit forecast above Wall Street's view.

Best Buy shares hit their lowest since December 2008 and were at their session low after Chief Executive Brian Dunn resigned after 28 years with the world's largest consumer electronics retail chain. The stock was down 4.3 percent at $21.67, after earlier dropping to a session low at $21.62.

Dow component Alcoa Inc , a bellwether for the industrial sector, will kick off the quarterly earnings season after the closing bell when it releases its results. Alcoa's stock slipped 2.1 percent to $9.40 in midday trading.

(Editing by Jan Paschal)