Stocks tumbled Thursday after a disappointing ISM report on manufacturing piled on to worries about the economic recovery.
The Dow Jones Industrial Average lost more than 100 points, falling below 9,600.
The Institute for Supply Management reported its gauge of manufacturing activity fell to 52.6 in September from 52.9 in August, short of expectations.
That came after an earlier report showed initial jobless claims jumped by 17,000 last week, much more than expected.
Investors shrugged off encouraging readings on housing and construction: Pending-home sales jumped 6.4 percent in August, the seventh straight month of gains. Economists had expected a gain of just 1 percent. Meanwhile, construction spending rose 0.8 percent that month, well above the 0.2-percent gain expected.
The biggest corporate news of the day is the resignation of Bank of America CEO Ken Lewis, who will resign at the end of the year following a tenure marked by controversy over the company's acquisitions of Merrill Lynch and Countrywide Financial.
BofA , which has risen sharply as the credit crisis has passed, ticked higher this morning.
It's a new month and a new quarter on Wall Street, and although stocks fell for five of the last six sessions, the third quarter ended with some impressive gains, including 15 percent advances for the Dow and S&P 500 and a 15.7 percent gain for the Nasdaq.
With the turning of the calendar page, investors are now focused on the upcoming earnings season and, more immediately, Friday's September employment report.
The centerpiece of Thursday's market action may be Fed Chairman Ben Bernanke's testimony before the House Financial Services Committee.
The text of his prepared testimony has been made public. He will tell lawmakers that regulatory reform should see the Fed share sweeping new oversight powers with other regulators, because the job of managing systemic risk may be too much for just one agency.
Watch a live-streaming video of Bernanke
September sales for major U.S. automakers also will be released, starting with Ford at noon New York time, with most automakers already saying we'll see a significant drop in sales from August due to the end of the popular "cash for clunkers" program.
In takeover news this morning, Cisco Systems is buying Tandberg, a Norwegian videoconferencing-equipment maker Tandberg for $3 billion in cash.
Other stocks to watch include Comcast and General Electric, as Comcast denies a report that it has a deal to buy CNBC parent NBC Universal from GE. GE, the parent of CNBC, had no comment on the story.
Penske shares tumbled about 10 percent after the company said late Wednesday that it has ended talks with General Motors to buy the Saturn brand.
— Peter Schacknow contributed to this report.
Still to Come:
THURSDAY: ISM manufacturing index; pending-home sales; construction spending; auto sales; Fed's Bernanke, Pianalto, Lockhart speak
FRIDAY: Sept jobs report; factory orders; Calif. IOUs mature
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