Wall Street nosedives

NEW YORK (AP) — Stocks began the fourth quarter with a slide as pessimism about the economy gripped investors.

The Dow Jones industrial average and the Standard & Poor’s 500 index posted their biggest drops in three months after reports on manufacturing and the labor market rattled the market, overshadowing good news on housing and consumer spending. The Dow tumbled 203 points, and bond prices jumped as investors sought a safer place for their money.

It was the sixth drop in seven days for stocks and another reminder of how fragile the market’s 50 percent gain since March has become. The mixed economic reports added urgency to questions about how strong the recovery really is and racheted up investors’ anxiety ahead of the Labor Department’s closely watched monthly jobs report today.

The Dow fell 203, or 2.1 percent, to 9,509.28. The drop was the biggest fall for the Dow since July 2, when it fell 223 points, or 2.6 percent, after the government said the nation’s unemployment rate had reached the highest level in decades.

The broader Standard & Poor’s 500 index fell 27.23, or 2.6 percent, to 1,029.85, and the Nasdaq composite index dropped 64.94, or 3.1 percent, to 2,057.48.

Several economic reports this week have raised doubts about the strength of the recovery and whether the market rally should continue. Despite ending on a wobbly note in September, stocks still put in a stellar third quarter. Both the Dow and the S&P 500 index gained 15 percent. It was the Dow’s best quarter in nearly 11 years.

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