US STOCKS-Market opens 2008 lower on oil, weak factory data
(Updates with details on Fed minutes)
NEW YORK, Jan 2 (Reuters) - U.S. stocks fell on the first trading day of the year on Wednesday after U.S. manufacturing data showed signs of contraction and oil hit $100 a barrel, raising the possibility of a recession in 2008.
The market briefly bounced off its session lows after comments from the Federal Reserve suggested the possibility of further interest rate cuts. Minutes from the Fed's last rate-setting meeting said a credit crunch could sharply stall economic growth and may require "substantial" monetary easing.
The Dow Jones industrial average .DJI was down 211.43 points, or 1.59 percent, at 13,053.39. The Standard & Poor's 500 Index .SPX was down 19.46 points, or 1.33 percent, at 1,448.90. The Nasdaq Composite Index .IXIC was down 41.68 points, or 1.57 percent, at 2,610.60.
Economically sensitive shares were among the top decliners on the Dow, which fell more than 200 points, as the Institute for Supply Management reported December U.S. factory activity contracted. Heavy equipment maker Caterpillar Inc. (CAT.N) was down 2.7 percent at $70.58, and diversified manufacturer Honeywell International Inc (HON.N) fell 2.2 percent to $60.21.
The Institute for Supply Management's manufacturing survey showed factory activity fell in December to 47.7, its weakest level since April 2003. A reading below 50 points indicates contraction. Another report showed private home-building fell to its lowest rate since August 2003. For details, see [ID:nN02647477].
U.S. crude oil prices rose more than $4 to $100 a barrel amid violence in OPEC members Nigeria and Algeria that caused concern about supply.
The run-up in crude helped boost oil-related shares, but hammered fuel-dependent industries, such as airlines. (Reporting by Jennifer Coogan; Editing by Leslie Adler)
