Wall Street suffered losses for a fourth straight day on Thursday as disappointing home sales, manufacturing and jobless data raised new doubts about growth in major sectors of the economy and prompted a sharp pullback from riskier assets.
Stocks got off on the wrong foot for the second half of the year after suffering through the worst quarter since late 2008.
U.S. manufacturing activity fell to its lowest level since December, while pending home sales dropped a record 30 percent in May.
None of the data is good for the bullish camp, which was expecting a V-shaped recovery for the rest of the year. The numbers suggest fatigue in the consumer sector and a deceleration in government spending as it relates to the stimulus, said Joseph Battipaglia, market strategist at Stifel Nicolaus.
The Dow Jones industrial average <.DJI> was down 113.81 points, or 1.16 percent, at 9,660.21. The Standard & Poor's 500 Index <.SPX> was down 16.35 points, or 1.59 percent, at 1,014.36. The Nasdaq Composite Index <.IXIC> was down 40.19 points, or 1.91 percent, at 2,069.05.
On Wednesday, the S&P 500 <.SPX> fell below the key 1,040 level held since February, falling from what chartists described as a very bearish head and shoulders trend reversal pattern, pointing to a major retreat in coming months.
For the second quarter ended Wednesday, stocks suffered their worst losses since the market meltdown triggered by the collapse of Lehman Brothers Holdings Corp.
Global equities fell to three-week lows after Chinese data showed moderation in the world's third-largest economy. The Nikkei average closed down 2 percent, while European markets were also off about 2 percent.
In other data, unemployment claims rose unexpectedly last week, heightening fears a labor market recovery was stalling. The government will report the closely watched non-farm payrolls data on Friday.
Shares of Citigroup Inc fell 2 percent to $3.69 after an early rally as the government sold 1.1 billion Citi shares to complete the second tranche of a plan to unload its stake in the big bank.
(Reporting by Angela Moon; editing by Jeffrey Benkoe)