Another disappointing manufacturing report spooked the markets and put a dent in Wall Street’s recovery hopes on Thursday, sending the Dow to its steepest sell-off in five months and marking a particularly ugly start to the fourth quarter.

The Dow Jones Industrial Average fell 203 points, or 2.09%, to 9509.28, the S&P 500 slid 27.23 points, or 2.58%, to 1029.85 and the Nasdaq Composite lost 64.94 points, or 3.06%, to 2057.48. The consumer-friendly FOX 50 sank 17.93 points, or 2.33%, to 753.17.
Monday's slide puts the markets in the red for the sixth day of the last seven and comes after weeks of the bears and even some bulls saying the stocks have gotten too far ahead of the slowly healing economy. An unexpected decline in the Institute for Supply Management's manufacturing report underscored that point and overshadowed upbeat news on pending home sales, which rose in August to the fastest pace since March 2007.
“We have seen some very positive news, especially on the housing front. But you’ve got to show me the bacon. You have to show us that the fundamentals support the price action,” said Peter Kenny, managing director at Knight Capital Group. “This is not a one-way ticket here. There’s some work to be done here on the downside.”
The triple-digit pullback quickly erases a slice of last quarter's huge gains, which were fueled by signs the Great Recession ended and hopes for a strong economic recovery. The Dow soared 1,265 points last quarter, its largest third-quarter gain since 1939 and best quarter overall since 1998. 
“I think the market is actually very nervous. I think this is going to be a very tough month,” NYSE trader Ben Willis of VDM Institutional Brokerage told FOX Business. “There is a great deal of concern whether or not this market in October will be able to hold this level.”
The Dow, which dropped about 50 points in the final 10 minutes alone, suffered its worst day since July 2, when it fell 223 points. Every single Dow component closed lower, with the steepest losses coming from JPMorgan Chase chemical giant DuPont (DD: 30.59, 0, 0%) and American Express and Walt Disney (DIS: 27.36, 0, 0%) closed with much smaller percentage losses. The benchmark index ended at its lowest level since Sept. 8.  The Nasdaq Composite saw even heavier selling, taking its biggest hit since June 22. Marvell Technology were two of the biggest percentage losers on the Nasdaq 100. 
“We’re focusing on the manufacturing data,” said Michael James, senior equities trader at Wedbush Morgan Securities. “I think people were predisposed to be selling things today. The data only reinforced the need to sell more aggressively.”
(Source: FoxBusiness)