THE Dow and S&P 500 suffered their worst one-day fall in three months yesterday after economic reports fueled fears about the recovery’s strength.<br /><br />The pullback occurred a day after stocks ended the third quarter with strong gains, with the Dow and S&P each up 15 per cent from the previous quarter.<br /><br /> Cyclical stocks, which are sensitive to the economy’s cycles, were among the worst performers, including technology and bank shares.<br /><br />The KWB bank index dropped 5 per cent while an index of semiconductors fell 4.8 per cent. Airlines also fell sharply, with an airline index down 8.3 per cent.<br /><br />The Institute for Supply Management’s index of national factory activity declined in September from August’s reading, and although the latest reading still indicated growth, it was sharply below economists’ forecast.<br /><br />Data on jobless claims also was worse than expected.<br /><br />“There was disappointment from the ISM this morning. It missed expectations,” said Mike O’Rourke, chief market strategist at BTIG.<br /><br />“With the last quarter ending, a lot of people were holding stuff up for window dressing and now you’re seeing profit-taking,” he added. “We’ve had a tremendous run up.”<br /><br />Analysts said the news added to anxiety ahead of today’s September jobs report from the government, the month's biggest data release.<br /><br />The Dow Jones industrial average tumbled 203.00 points, or 2.09 per cent, to end at 9,509.28. The Standard & Poor’s 500 Index. SPX slid 27.23 points, or 2.58 per cent, to 1,029.85. The Nasdaq Composite Index lost 64.94 points, or 3.06 per cent, to 2,057.48.<br /><br />It was the third straight day of declines for stocks and the Nasdaq’s worst fall since 22 June, just before the market suffered a modest pullback.<br /><br />All 30 Dow components finished in the red, with the Dow’s biggest decliners including <strong>JPMorgan Chase</strong>, down 5.6 per cent at $41.37, and <strong>Boeing</strong>, down 3.8 per cent at $52.11.<br /><br /><strong>Bank of America</strong> shares slipped 4.2 per cent to $16.21 after chief executive Ken Lewis said he was retiring after months of being hounded.