* Fresh concerns over economy spark sell-off
* Lower commodity prices hit resource shares
* Goldman Sachs downgrades Wal-Mart, stock slides
* Dow off 2.1 pct, S&P off 2.4 pct; Nasdaq off 2.3 pct
* For up-to-the-minute market news click []
(Updates with volume, adds details on volatility)
By Leah Schnurr
NEW YORK, June 15 (Reuters) - U.S. stocks tumbled, marking
their worst slide in a month on Monday after regional
manufacturing data dented optimism about the economy's health
and resource shares fell alongside commodity prices.
After a series of signs the economy may be stabilizing,
investors are looking for more definitive signals of its
improving health. Analysts also said a pullback was
unsurprising after a three-month rally.
Economists had expected to see slight improvement in the
New York Fed's Empire State index, but the survey showed the
factory sector shrank at a much more severe rate in June than
the previous month. For details, see [].
"The bottom line is investors were starting to factor in a
V-shaped recovery to the economy," said Alan Lancz, president
of Alan B. Lancz & Associates Inc, in Toledo, Ohio.
"Not only do prices get ahead of themselves, but there's
also a situation where if we don't get that V-shaped recovery,
then you have more than just a temporary pullback. That's what
might scare investors in the more immediate term."
Manufacturers' shares fell, including 3M <MMM.N>, which
was down 2.8 percent at $59.31, while Caterpillar <CAT.N> shed
4.3 percent to $36.12.
Oil prices fell from nearly an eight-month high after
Russia expressed confidence in the U.S. dollar as the world's
reserve currency, increasing the greenback'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.
Chevron <CVX.N> fell 2.2 percent to $71.08. The S&P energy
index <.GSPE> slid 2.3 percent.
The Dow Jones industrial average <> fell 187.13
points, or 2.13 percent, to 8,612.13. The Standard & Poor's
500 Index <.SPX> lost 22.49 points, or 2.38 percent, to
923.72. The Nasdaq Composite Index <> dropped 42.42
points, or 2.28 percent, to 1,816.38.
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.
In light volume, the indexes racked up their biggest
one-day percentage loss since mid-May.
But the broad S&P 500 is still up 36.5 percent from the
12-year closing low of March 9.
A SPIKE IN VOLATILITY
The CBOE Volatility Index <.VIX>, known as Wall Street's
fear gauge, closed above the 30 level for the first time since
early June, suggesting more turmoil could be in store. The VIX
jumped 9.5 percent to end at 30.81, its biggest percentage
gain since late April.
This week marks quadruple witching, a term used to
describe the quarterly expiration of June equity options,
index options, single stock futures and index futures. This
can bring more volatility as players adjust or exercise their
derivative positions.
Sentiment also cooled after Goldman Sachs cut its rating
on Wal-Mart Stores Inc <WMT.N> to "neutral" from "buy," saying
it did not see a lot of positive catalysts to drive shares
higher in the near-term as expense pressures and tougher sales
comparisons persist. []
Wal-Mart, a Dow component, fell 2.8 percent to $48.46, and
was among the top drags on the blue-chip Dow average. The
S&P's retail index <.RLX> fell 1.4 percent.
The technology sector, which has helped lead the market
rally, slipped as investors took profits. Bellwethers such as
Qualcomm Inc <QCOM.O> fell 3.8 percent to $44.31 and Oracle
Corp <ORCL.O> slipped 3 percent to $20.22.
Trading volume was low on the New York Stock Exchange,
with only about 1.15 billion shares changing hands, well below
last year's estimated daily average of 1.49 billion. On
Nasdaq, about 2.19 billion shares traded, below last year's
daily average of 2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by
2,595 to 457 while on the Nasdaq, decliners beat advancers by
2,127 to 552.
(Editing by Jan Paschal)
