Stocks Tumble on Disappointing Data

Worse-than-expected reports on manufacturing conditions and the housing market sent major indexes down over 2% Monday

U.S. stocks closed sharply and broadly lower Monday, with major indexes down over 2% on the session. The Dow Jones industrial average sank back into negative territory for the year to date.

A weak reading on manufacturing in the form of the Empire State index pressured the market, threatening investors' bets on an economic recovery later this year. April data from the Treasury Dept. showed a net outflow of capital out of the U.S., and the NAHB housing market index for June fell a point lower.

Meanwhile, steep drops in oil and metal futures prices put downward pressure on commodities producers.

On Monday, the Dow Jones industrial average finished lower by 187.13 points, or 2.13%, at 8,612.13. The broad Standard & Poor's 500-stock index fell 22.49 points, or 2.38%, to 923.72. The tech-heavy Nasdaq composite index lost 42.42 points, or 2.28%, to 1,816.38.

Meanwhile, Treasuries rallied, with the yield on the 10-year note falling to 3.73%. The dollar was up after Russia's Finance Minister reaffirmed that the greenback is the world's major reserve currency.

August gold futures sank to $929.00 per ounce. July crude oil futures fell to $70.34 per barrel.

Markets in Europe slumped. London stocks fell 2.61%, Paris was down 3.20%, and Frankfurt dropped 3.54%. Asian stocks finished mixed, with Tokyo down 0.95%, Hong Kong lower by 2.07%, and Shanghai up 1.67%.

The world's largest economies are beginning to stabilize but still face major risks amid an ongoing global recession, G8 finance ministers say. At a meeting in Italy of G8 nations over the weekend, the ministers said stock markets were rising, interest rates more stable, and consumer confidence was returning. However, U.S. Treasury Secretary Timothy Geithner led warnings that it was too early to wind down economic stimulus packages. He said they should remain in place until a global recovery was under way.

In company news Monday, conglomerate United Technologies (UTX) indicated that the planned to affirm its earnings guidance.

Boeing (BA) said it expected capital to be more readily available ahead.

Goldman Sachs (GS) downgraded Wal-Mart (WMT) to neutral.

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