Wall Street declined on Monday, with the S&P 500 registering its worst drop since June, as manufacturing in the world’s largest economy slowed more than estimated in January as new order growth plunged by the most in 33 years.
The Dow Jones industrial average fell 326 points or 2.08%, to 15,373, the S&P 500 lost 41 points or 2.28%, to 1,742 and the Nasdaq Composite dropped 107 points or 2.61%, to 3,997.
The Institute for Supply Management’s factory index fell to 51.3 from 56.5 in January souring investor sentiment sharply.
Selling was broad-based. Telecoms and consumer discretionary were among the worst performing sectors. The Dow Jones Transportation average dropped 3.2%.
Stocks have been pressured as the Federal Reserve confirmed its commitment to withdrawing its market-friendly stimulus and by concern about growth in China.
Telecoms suffered on speculation AT&T Inc's (T.N) plan to slash prices on its large shared data plans could prompt other US carriers, particularly larger rival Verizon Wireless (VZ.N), to offer new discounts. AT&T lost 4.1% and Verizon lost 3.4%.
Charter Communications Inc (CHTR.O) is discussing raising its bid for Time Warner Cable Inc (TWC.N), sources said. TWC shares added 0.5%.
Britain's Smith & Nephew (SN.L) is to buy ArthroCare Corp (ARTC.O) for $1.7 billion in cash to strengthen its treatments for sports injuries. ArthroCare shares rose 8.2%.
Pfizer's (PFE.N) shares gained 0.7%, the only Dow stock to close higher, after its experimental breast cancer drug significantly delayed progression of symptoms in a mid-stage trial, meeting the study's primary goal.
Jos. A. Bank Clothiers Inc. slid 5% after telling Men’s Wearhouse Inc. it will not enter takeover talks.
Ford Motors fell 2.7% and General Motors slipped 2.3% after the largest US automakers reported wider declines in deliveries than estimated.
In Asia, shares declined on Tuesday in late morning trade after data showing weaker-than-expected growth in US manufacturing helped extend a rout that wiped about $1.9 trillion from the value of global equities last month.
The MSCI Asia Pacific Index lost 2.2% to 131 at 10 a.m. in Hong Kong. Japan’s Nikkei 225 plunged 2.6% to continue its slide after losing 8.5% last month. Hong Kong’s Hang Seng Index slid 2.3%. South Korea’s Kospi index fell 1.5%. Australia’s S&P/ASX 200 Index lost 1.4% and New Zealand’s NZX 50 Index dropped 0.8%. Singapore’s Straits Times Index retreated 1%.
Markets in mainland China, Taiwan and Vietnam are closed for holidays.