NO SUPER TUES.

An astonishing collapse in the health of the US economy’s service sector led to the worst day the markets have seen so far this year, despite the Giants Super Bowl victory parade outside the Big Board.

The Dow Jones industrial average plummeted 370.03 points, or 2.9 percent, while the widely watched Standard & Poor’s 500-stock index dove 3.2 percent, or 44.18 points, to hit 1,336.64. The tech-heavy Nasdaq fell 3.1 percent, or 73.38 to 2,309.57.

“There was no place to hide; everything from utilities to consumer staples took a big hit,” said Jeff Rubin, market analyst at Birinyi & Co.

The catalyst for this carnage was the report from the Institute for Supply Management showing that the index measuring business activity in the service sector contracted dramatically.

Economists had expected the index, which registered 54.4 in December, to fall, perhaps to 52 or 52.5. In fact, the ISM reported a reading of 41.9.

Most market participants have never seen a drop of that magnitude before and the data turned fears of a recession into a full-fledged panic.

“In a single month, we have gone from what might be seen as slightly higher than normal numbers to outright recessionary lows – that’s astonishing,” said Bill Dwyer, who manages portfolios for MTB Investment Advisors.

Historically, Dwyer said, a reading below 50 is associated with zero growth in gross domestic product.

So far, the economy is holding at above that level; last week, the Department of Commerce announced that fourth-quarter gross domestic product rose 0.6 percent, a big drop from third-quarter growth rates of 4.9 percent.

“This ISM data is one of the first pieces of statistical evidence to support what everyone is worrying about – that we are heading straight for a recession,” Dwyer argues.

(The classic definition of a recession is two successive quarters of negative GDP growth; if we are entering a recession now, it’s not likely to be confirmed before the summer.)

Neal Soss, chief economist at Credit Suisse in New York, had drawn comfort that the recent interest rate cuts by the Federal Reserve would stave off a recession. However, Soss now estimates the chances of a recession at around a third, compared to 50 percent late last year.

The ISM data is particularly worrying, because it shows tremendous weakness in the service sector, which makes up some 70 percent of the economy.

If widespread job losses continue, both within the banking world and elsewhere in the economy, that could make the outlook even bleaker.

“If unemployment levels rise, the stimulus package and lower interest rates won’t mean a thing,” said Dwyer, gloomily.

The sudden deterioration in the economic backdrop puts more pressure on legislators to push through the economic stimulus package and on monetary policymakers to further slash interest rates.

But neither of those steps is necessarily capable of instilling the biggest missing ingredient in the market: confidence.

“You can cut as much as you want, but you can’t force people to lend, borrow or spend” if they aren’t confident in the economic outlook, he added.