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Weak global data drags Wall Street 1 percent lower

Thu Jun 21, 2012 1:47pm EDT

NEW YORK (Reuters) – Stocks tumbled on Thursday as recent market gains gave way to brisk selling on signs of manufacturing weakness in the United States and around the globe.

Energy and materials company shares led declines on Wall Street as commodity prices fell. U.S. crude futures slipped below $80 a barrel for the first time since October and copper tumbled almost 3 percent. The SP energy sector index .GSPE lost 2.9 percent.

Data on Thursday showed business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed growth by U.S. factories growth. ID:nL1E8HL9AU]

Other U.S. data showed home resales fell in May. Applications for unemployment insurance slipped last week, but the four-week moving average for new claims rose to the highest level since early December.

“Markets are worried about the slowdown, not only in U.S. figures but all around the world,” said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida. “The market was extremely overbought coming into this week, and the news gave it an excuse to sell off.”

Softening data globally lifted hopes of central bank action to support the economy. The U.S. Federal Reserve announced on Wednesday it would extend one monetary stimulus program and said it was ready to do more to help economic growth if necessary.

The Dow Jones industrial average .DJI fell 140.70 points, or 1.10 percent, to 12,683.69. The SP 500 Index .SPX dropped 17.79 points, or 1.31 percent, to 1,337.90. The Nasdaq Composite .IXIC lost 45.54 points, or 1.55 percent, to 2,884.91.

Semiconductor stocks weighed on the Nasdaq after chipmaker Micron Technology Inc (MU.O) posted a net loss for the fourth straight quarter. Micron lost 6.6 percent to $5.72 and the PHLX semiconductor index .SOX dropped 2.7 percent.

Celgene Corp (CELG.O) slumped 11.2 percent to $59.66 after the company said it was withdrawing a European application for wider use of its big-selling Revlimid blood cancer drug.

Philip Morris International (PM.N) lost 2.3 percent to $86.51 after forecasting full-year earnings below Wall Street estimates, saying a strong dollar has hurt sales abroad.

Philip Morris’ news followed other disappointing outlooks from fellow multinationals PepsiCo (PEP.N) and Procter Gamble (PG.N).

Onyx Pharmaceuticals Inc (ONXX.O) surged 44 percent to $64.08 after U.S. drug advisers backed the company’s drug for cancer patients. Ligand Pharmaceuticals Inc (LGND.O), which stands to receive royalties from sales of the drug, gained 15.5 percent to $16.80.

(Reporting by Rodrigo Campos; Editing by Kenneth Barry)

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