US stocks tumble 1% after reports on weak US, Chinese manufacturing data

NEW YORK (AFP) - United States stocks fell sharply in early trade on Monday as lackluster reports on Chinese and US manufacturing activity added to concerns about economic growth and emerging-market economies.

About 55 minutes into trade, the Dow Jones Industrial Average slumped 156.92 points (1 per cent) to 15,541.93.

The broad-based S&P 500 sank 18.85 (1.06 per cent) to 1,763.74, while the tech-rich Nasdaq Composite Index fell 51.31 (1.25 per cent) to 4,052.57.

Global markets already were dampened by China's purchasing managers index for manufacturing, which fell to 50.5 in January from 51.0 in December and 51.4 in November.

US stock losses accelerated after the Institute for Supply Management reported that US manufacturing activity fell sharply in January. The ISM index sank to 51.3 from 56.5 in the previous month.

Dow component Pfizer shot up 3.2 per cent after announcing positive clinical data on its palbociclib medication for post-menopausal women with advanced or newly diagnosed metastatic breast cancer.

Ford Motor fell 3.1 per cent. Ford said US vehicle sales dropped seven percent in January, citing severe winter weather as a factor.

Herbalife, a marketer of weight-management products, rose 0.7 per cent after the company boosted its balance for share repurchases to US$1.5 billion (S$1.91 billion) from US$653 million.

Food distributor Sysco declined 1 per cent as revenues of US$11.2 billion lagged expectations of US$11.35 billion. The sales environment remained "quite challenging" for Sysco's customers in the restaurant business, where profit margins continued to be "pressured," Sysco said.

Men's retailer Jos. A Bank fell 3.9 per cent after it rebuffed the latest takeover offer from Men's Wearhouse. Jos. A Bank is also reportedly in talks to acquire Eddie Bauer. Men's Wearhouse lost 5.8 per cent.

Bond prices jumped. The yield on the 10-year US Treasury fell to 2.62 per cent from 2.67 per cent on Friday, while the 30-year dropped to 3.58 per cent from 3.62 per cent. Bond prices and yields move inversely.