"It's a combination of the energy stocks, then the industrials and now the tech stocks, which have joined on the downside," Donald Selkin, chief market strategist at National Securities in New York, told Reuters.
The latest economic data were disappointing. The Institute for Supply Management said its manufacturing index fell to 52.7 in July, down from 53.5 in June.
"We're seeing weak manufacturing growth," Bricklin Dwyer, an economist at BNP Paribas in New York, who had forecast a reading of 53, told Bloomberg. "We expect slow improvement. Housing and consumer-related industries are the bright spot."
In two separate reports, the Commerce Department said consumer spending increased 0.2 percent in June, following a 0.7 percent gain in May, while construction spending eked out a 0.1 percent increase in June, following an upwardly revised 1.8 percent advance in May.
There was good news too. Ford said sales rose 5 percent in July, while General Motors said sales climbed 6 percent, both car makers exceeding expectations. Shares of Ford gained 0.6 percent, while those of GM added 0.2 percent.
In Europe, the Stoxx 600 Index ended the day with a 0.8 percent advance from the previous close. France's CAC 40 Index rose 0.8 percent, while Germany's DAX Index gained 1.2 percent. The UK's FTSE 100 Index slipped 0.1 percent.
Better-than-expected earnings from companies including Heineken and Commerzbank helped.
However, Greece's ASE Index plunged 16 percent in its first day of trading after five weeks of suspension. Bank stocks were hit especially hard. Fresh rules limited the decline.
"Without the restrictions, the drop would be steeper," Nikos Kyriazis, an equity sales trader at NBG Securities in Athens, told Bloomberg. "The numerous volatility interruptions and the auctions that follow these interruptions hinder the continuous trading for stocks as we know it. There are a lot of orders in the system that are not executable."
