US STOCKS-Market sinks on $100 oil, weak factory data
(Updates to early afternoon, changes byline)
By Jennifer Coogan
NEW YORK, Jan 2 (Reuters) - U.S. stocks plunged on the first trading day of 2008 on Wednesday after oil hit $100 a barrel and U.S. manufacturing data showed signs of contraction, raising fears the economy may be heading into recession.
Further weighing down the market, Banc of America cut its rating on eight chip maker stocks, including No. 1 Intel Corp (INTC.O), sending the sector down sharply [ID:nBNG45144].
Economically sensitive shares were among the top decliners on the Dow, including heavy equipment maker Caterpillar Inc. (CAT.N), down 2.5 percent at $70.72, and diversified manufacturer Honeywell International Inc (HON.N), down 2.5 percent to $60.02.
The Dow Jones industrial average .DJI was down 205.98 points, or 1.55 percent, at 13,058.84. The Standard & Poor's 500 Index .SPX was down 21.02 points, or 1.43 percent, at 1,447.34. The Nasdaq Composite Index .IXIC was down 49.18 points, or 1.85 percent, at 2,603.10.
The Institute for Supply Management's manufacturing survey showed factory activity fell in December to its weakest level since April 2003 and showed contraction in the sector. 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.
Intel Corp (INTC.O) fell 5.7 percent at $25.14. The Philadelphia Stock Exchange Semiconductor index .SOXX was down 3.2 percent. (Reporting by Jennifer Coogan; Editing by Leslie Adler)
