Wall Street hit by poor factory data

US STOCKS tumbled yesterday, marking their worst slide in a month after regional manufacturing data dented optimism about the economy&rsquo;s health and resource shares fell alongside commodity prices.<br /><br />After a series of signs the economy may be stabilising, investors are looking for more definitive signals of its improving health. Analysts also said a pullback was unsurprising after a three-month rally.<br /><br />Economists had expected to see slight improvement in the New York Fed&rsquo;s Empire State index, but the survey showed the factory sector shrank at a much more severe rate in June than the previous month. <br /><br />Manufacturers&rsquo; shares fell, including <strong>3M</strong>, which was down 2.8 per cent at $59.31, while <strong>Caterpillar</strong> shed 4.3 per cent to $36.12.<br /><br />Oil prices fell from nearly an eight-month high after Russia expressed confidence in the US dollar as the world&rsquo;s reserve currency, increasing the greenback&rsquo;s safe-haven appeal. Commodity prices and the dollar have moved inversely of late. Gains in the dollar makes oil more expensive for holders of other currencies.<br /><br /><strong>Chevron</strong> fell 2.2 per cent to $71.08. The S&amp;P energy index slid 2.3 per cent. The Dow Jones industrial average fell 187.13 points, or 2.13 per cent, to 8,612.13. The Standard &amp; Poor&rsquo;s 500 Index lost 22.49 points, or 2.38 per cent, to 923.72. The Nasdaq Composite Index dropped 42.42 points, or 2.28 per cent, to 1,816.38.<br /><br />While the recent run-up in commodity prices had helped stocks extend their rally, there has also been concern that a surge in oil and other commodities could hamper any budding economic recovery. Higher energy costs are a drag on consumer spending and corporate profits. <br /><br />In light volume, the indexes racked up their biggest one-day percentage loss since mid-May. But the broad S&amp;P 500 is still up 36.5 per cent from the 12-year closing low of early March.<br /><br />Sentiment also cooled after Goldman Sachs cut its rating on<strong> Wal-Mart Stores</strong> to &ldquo;neutral&rdquo; from &ldquo;buy&rdquo; saying it did not see a lot of positive catalysts to drive shares higher in the near-term as expense pressures persist. Wal-Mart was among the top drags on the blue-chip Dow average. It fell 2.8 per cent to $48.46.