U.S. stocks slid on Wednesday as a steep drop in U.S. durable goods orders in June fueled fears of more economic weakness and falling commodity prices hit shares in the energy and resources sectors.
A sell-off in China's stock market on concerns that authorities there might curb bank lending also hampered the broader market.
I'm surprised the markets didn't open down more strongly, based on what happened in China, said Frank Gretz, market analyst and technician for Shields & Co in New York. It's most affecting certain sectors like the commodities trade.
Shares of energy companies weighed on the Dow, with Chevron Corp falling 1.8 percent to $67.10, and Exxon Mobil Corp losing 1.2 percent to $71.02.
The S&P energy index <.GSPE> slid 2.4 percent. U.S. front-month crude futures declined $3.03, or about 4.5 percent, to $64.20 a barrel.
Other natural resources stocks also fell, including miners and big exporters, with Freeport-McMoRan Copper & Gold Inc down 5 percent at $55.66.
The Dow Jones industrial average <.DJI> shed 55.02 points, or 0.61 percent, to 9,041.70. The Standard & Poor's 500 Index <.SPX> fell 7.49 points, or 0.76 percent, to 972.13. The Nasdaq Composite Index <.IXIC> fell 13.20 points, or 0.67 percent, to 1,962.31.
The Commerce Department said June U.S. durable goods orders fell 2.5 percent, the largest drop since January, after rising a revised 1.3 percent in May, which previously was reported as a 1.8 percent surge. Durable goods are manufactured goods such as washing machines, refrigerators and cars, intended to last three years or more.
During Asia's regular trading hours on Wednesday, the Shanghai Composite Index <.SSEC> slid 5 percent -- its biggest daily decline in eight months.
But China's benchmark stock index is up 80 percent this year overall.
Their market has been so strong that a 5 percent drop is not substantial, said Gretz.
Talk that China might seek to cool its markets was a worrying development as some investors had bet that Chinese demand would underpin the global economic recovery.
Caterpillar Inc , a maker of bulldozers and excavators, shed 3.2 percent to $41.51 and ranked as the biggest drag on the Dow industrials. The stock of aluminum producer Alcoa Inc , another Dow component, lost 2.7 percent to $10.96 on the New York Stock Exchange.
Among the Nasdaq's major decliners, Yahoo Inc tumbled after the Internet media company announced an Internet advertising deal with Microsoft Corp .
Yahoo's stock tumbled 11.4 percent to $15.26 as some investors were disappointed by the limited scope of the deal. In contrast, Microsoft's stock was up 0.2 percent at $23.51.
(Editing by Jan Paschal)