Stocks fell on Monday, putting major indexes on track for their worst day in seven weeks, as weak data from Japan and a disappointing outlook from retailer Lowe's Cos
Lowe's stock dropped 10 percent to $20.55 as the company gave an outlook that fell short of Wall Street's estimates. The second-largest home improvement retailer also said it was slowing plans for expansion.
The results follow disappointing U.S. consumer sentiment and retail sales data last week, adding to worries about weak consumer spending.
Selling was broad-based, but shares sensitive to the economy's cycles fell the most, including industrials <.GSPI>, down 2.8 percent, and financials <.GSPF>, down 3.4 percent.
In Japan, while gross domestic data showed the economy pulled out of recession in the second quarter, economists warned that exports could slow as the effect of stimulus measures wears off.
The GDP number in Japan sort of got things started, said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.
Also, people are looking at stocks and seeing they're very expensive ... they're not being supported by the actual fundamentals of the economy.
The S&P 500 is still up about 45 percent from its early March lows.
The Dow Jones industrial average <.DJI> fell 155.83 points, or 1.7 percent, to 9,165.87. The Standard & Poor's 500 Index <.SPX> dropped 21.25 points, or 2.1 percent, to 982.94. The Nasdaq Composite Index <.IXIC> lost 49.16 points, or 2.5 percent, to 1,936.36.
Stocks also sold off in Europe and Asia.
Shares of heavy equipment maker Caterpillar Inc
Lowe's gave a third-quarter earnings outlook that was below expectations, with Chief Executive Robert Niblock saying consumers remain under pressure even though housing is showing signs of bottoming out.
Shares of rival Home Depot Inc
Offsetting some of the declines earlier was regional data from the New York Federal Reserve that showed the state's factory sector was better than expected in August.
(Editing by Padraic Cassidy)