Stocks Dive Deep Into RedStocks Dive Deep Into Red
Tue Sep 3,12:33 PM ET
NEW YORK (Reuters) - Stocks plowed deeper into negative ground at midday on Tuesday after scant growth in the U.S. manufacturing sector raised worries a lackluster economy will squeeze corporate profits.
Major market gauges hit session lows. The blue-chip Dow Jones industrial average <.DJI> sank 292 points, or 3.38 percent, to 8,370. The broad Standard & Poor's 500 index <.SPX> slumped 31 points, or 3.49 percent, to 884, while the Nasdaq Composite <.IXIC> surrendered 42 points, or 3.26 percent, to 1,271.
The Institute for Supply Management's closely watched index of factory business conditions was unchanged in August at 50.5, posting a seventh month of growth but missing expectations for a rise to 51.6. New orders, a key source of future growth, fell for the first time since last November.
Investors worry a soft economy will drag on already shaky corporate profits. Chip giant Intel Corp. fell almost 4 percent after a bearish call ahead of the company's update due on Thursday. Citigroup slumped more than 8 percent after an investment house cut the banking giant to a rare sell rating as lawmakers take a closer look at the company's corporate governance.
U.S. Treasuries and gold stocks gained as skittish investors sought safe havens. The dollar weakened as sharp declines in world stock markets and the weaker-than-expected U.S. manufacturing index raised the specter of diminished capital flows to the United States.