Stocks tumbled again on Wednesday, leaving the benchmark S&P 500 on pace for a sixth straight decline as frustration with the euro zone's debt crisis coupled with weak Chinese factory data sank investor sentiment.
Debt problems that have plagued Europe and the United States have pressured markets, knocking the S&P down more than 7 percent over the last six sessions.
World stocks hit their lowest in six weeks on Wednesday as weak demand in a German bond auction heightened fears the euro zone crisis would worsen, although a German official downplayed those worries.
Clearly Europe is continuing to drive the bus. The market is exhausted, it is tired of the lack of leadership on both sides of the pond, it is tired of the continuing drama that is playing out there that no one seems to be paying attention to, said Ken Polcari, managing director at ICAP Equities in New York.
The path of least resistance is lower because the market is starting to say to you it is getting disgusted with the lack of any concrete plan. Whether it is the ECB monetizing the debt, whatever it is, the market is not getting anything.
Data showed Chinese manufacturing shrank the most in 32 months in November, intensifying concerns about a global economic slowdown. U.S. crude oil fell 2.6 percent on fears of reduced demand from China, the world's No. 2 economy.
U.S. data painted a mixed picture and showed little reason for optimism. New unemployment benefit claims rose last week and consumer spending barely increased in October, while other reports showed new orders for a range of long-lasting manufactured goods rose.
The Dow Jones industrial average <.DJI> dropped 192.65 points, or 1.68 percent, to 11,301.07. The Standard & Poor's 500 Index <.SPX><.INX> fell 21.25 points, or 1.79 percent, to 1,166.79. The Nasdaq Composite Index <.IXIC> lost 50.51 points, or 2.00 percent, to 2,470.77.
All 10 S&P sectors were negative, with financials among the biggest decliners over concerns about exposure to European debt. JPMorgan Chase & Co
Economically sensitive stocks such as energy and commodity-related issues were also lower. The PHLX Oil service sector index <.OSX> dropped 3.2 percent and the S&P materials sector <.GSPM> fell 2.3 percent. Schlumberger Ltd
Volume was light ahead of the U.S. Thanksgiving holiday, when markets are closed. About 2.67 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq by midday, below the daily average.
One of the few bright spots on the S&P, Deere & Co
(Editing by Padraic Cassidy)