Stocks slump anew

NEW YORK (CNNMoney.com) -- Wall Street resumed its selloff Thursday, after a one-day reprieve, as investors responded to another decline in overseas markets and a big jump in a key inflation measure.

But a surprisingly strong read on the manufacturing sector of the economy helped the market cut its losses after a brutal open.

The Dow Jones industrial average (Charts) sank about 100 points, or 0.8 percent, in the early going, after being down about 200 near the open.

The broader S&P 500 (Charts) index lost 0.8 percent and the Nasdaq (Charts) composite lost 1.2 percent.

Stocks managed modest gains Wednesday, as Wall Street tried to stabilize after Tuesday's battering, in which the Dow saw its worst one-day point loss since the day the market reopened after the Sept. 11 attacks.

Stocks stabilized Wednesday but gains were slight, despite comments from Federal Reserve Chairman Ben Bernanke providing some comfort.

On Thursday, the declines resumed, with investors eying another steep selloff in Chinese markets and a subsequent decline in European markets.

A 9 percent decline for the Shanghai market Tuesday is what got the ball rolling, creating a bit of a domino effect as markets in a variety of countries slumped in response to China.

Adding to worries for investors Thursday: a report showing that personal income and spending, as well as the report's closely-watched inflation measure, all rose more than expected in January.

That was countered by a report released after the start of trading showing a bigger-than-expected jump in the February ISM manufacturing index to a level that signals expansion in the sector.

U.S. light crude oil for April delivery fell 44 cents to $61.35 a barrel on the New York Mercantile Exchange.

Treasury prices gained as investors sought safety, lowering the yield on the benchmark 10-year note rose to 4.54 percent from 4.56 percent late Wednesday. Bond prices and yields move in opposite directions.

The dollar slumped versus the euro and the yen, with the Japanese currency surging as traders rush to pay back yen loans.