Selloff on Wall Street

NEW YORK (CNNMoney.com) -- Stocks slumped Wednesday, starting November off on the wrong foot, after a pair of weak economic reports sparked worries about the speed of the economic slowdown, giving investors a reason to retreat from the recent rally.

The Dow Jones industrial average (down 49.71 to 12,031.02, Charts) lost 0.4 percent. The blue-chip barometer has closed at record highs in 13 of the previous 22 sessions.

Special Reportfull coverage Triple the salary - thanks to nukes Oil falls near $79 as Ida weakens Oil sinks nearly 3% after jobs report Oil slips below $80 Oil recovers to post gains Oil slides on weak consumer data

The broader S&P 500 (down 10.13 to 1,367.81, Charts) index lost 0.7 percent. The tech-fueled Nasdaq composite (down 32.36 to 2,334.35, Charts) lost 1.4 percent. Both indexes hit more than 5-1/2 year highs last week.

Treasury prices rallied, lowering the corresponding yields. The dollar weakened versus other major currencies. Oil prices were little changed and gold prices rose.

Stocks rose at the open Wednesday, as investors welcomed falling oil prices and some merger news. But the market lost steam following the release of the morning economic reports, including the surprisingly weak ISM manufacturing report for October.

"Pretty much all the numbers this morning pointed toward a weaker economy," said Tom Schrader, managing director of U.S. equity trading at Legg Mason.

"In the past weaker economic news was seen as a good thing, because it meant the Fed doesn't have to raise rates again," Schrader said. "But now people are saying they're less concerned about rates and more concerned about a slowing economy."

Released at around the same time as the ISM index, another report showed that construction spending fell 0.3 percent in September, a bigger dip than what economists were expecting.

An earlier report from ADP Employer Services showed that employers added around 128,000 jobs to their payrolls in October, providing an optimistic sign for Friday's widely-watched government employment release.

But after several days of weak economic news, investors opted to focus on the negative, particularly given the market's recent run, said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

However, he said that any pullback would be healthy in light of the market's recent run, and stocks should be able to recharge going forward.

"The backdrop remains positive except for the recent economic news," he said.

Thursday brings weekly jobless claims, a report on third-quarter productivity, and October sales figures from a broad swath of retailers.

Earnings are due from Barrick Gold (Charts) and Blockbuster (Charts), among others.

A number of big tech stocks declined, including Apple Computer (down $1.92 to $79.16, Charts), Dell (down $0.31 to $24.02, Charts) and Yahoo! (down $0.35 to $25.99, Charts).

Chip stocks slumped, led by Intel (down $0.32 to $21.02, Charts), Advanced Micro Devices (down $0.54 to $20.73, Charts) and Altera (down $0.71 to $17.73, Charts).

Financial and banking stocks, retail, telecom and biotech rounded out the list of losing sectors.

In merger news, drugstore CVS said it will buy Caremark, a pharmacy benefits manager, for $20.8 billion in stock, confirming earlier media reports that it would do so. Shares of CVS (down $2.32 to $29.06, Charts) slumped 7.4 percent. Caremark (down $1.06 to $48.17, Charts) lost 2.2 percent, giving back morning gains.

In the printing services industry, R.R. Donnelley & Sons (up $0.39 to $34.25, Charts) said it will buy rival Banta (up $7.87 to $52.15, Charts) for $1.3 billion in cash.

Automakers released October sales throughout the day, with both General Motors (down $0.27 to $34.65, Charts) and Ford Motor (up $0.24 to $8.52, Charts) reporting improved results.

In earnings news, Time Warner (down $0.24 to $19.77, Charts) reported quarterly sales and earnings that rose from a year earlier, but were shy of forecasts. The parent of CNNMoney.com also reaffirmed its profit outlook for the full year. The stock lost 1.2 percent.

Shares of MasterCard (up $10.97 to $85.07, Charts), the credit card association, rallied almost 15 percent in active NYSE trading after reporting quarterly earnings and sales that surged from a year earlier and beat estimates.

Garmin (down $8.43 to $44.98, Charts), a maker of navigational devices, slumped over 15.8 percent in active Nasdaq trading after reporting quarterly revenue that rose from a year earlier, but missed analysts' expectations. The company also reported higher quarterly earnings that met estimates.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by almost two to one on volume of 1.8 billion shares. On the Nasdaq, decliners trounced advancers 11 to four on volume of 2.07 billion shares.

Stocks were mixed Tuesday after disappointing reads on consumer confidence and manufacturing in the Midwest sparked worries about the economy. But the declines were modest at the end of an otherwise strong month - and an unusually strong October - on Wall Street.

U.S. light crude oil for December delivery fell 2 cents to settle at $58.71 a barrel on the New York Mercantile Exchange. The price of oil fluctuated throughout the session following the release of a mixed weekly oil inventories report in the morning.

Treasury prices rose, lowering the yield on the 10-year note to 4.56 percent from around 4.61 percent late Tuesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar weakened versus the euro and the yen.

COMEX gold for December delivery added $12.50 to end at $619.30 an ounce.

Beware choppy waters ahead

More on investing

More on the markets

Superstar funds lag, investors bail