Wall St slips on disappointing ISM report; Dow down 203 pts

The Dow plunged 203 points, or 2.1%, to 9,509.28. The S&P 500 index fell 27.23 points, or 2.6%, to 1,029.85, and the Nasdaq Composite Index slipped 64.94 points, or 3.1%, to 2,057.48.

It was some disappointing news on the economic front that rattled investors. The institute for supply management reported its gauge of manufacturing activity fell to 52.6 in September.

That came after another disappointing jobless claims report, which showed initial jobless claims jumped by 17,000 last week, much more than expected. Continuing claims came in over 6 million, which is below the consensus estimate and down 70,000 from the previous week.

The market meanwhile shrugged off encouraging readings on housing. Construction spending surprised with a 0.8% increase in August, while pending home sales for August surprised some by increasing 6.4% in August.

Meanwhile, personal income and spending for August were up 0.2% and 1.3%, respectively. Both exceeded expectations, while core personal consumption climbed a mere 0.1%, as expected.

Meanwhile the dollar rose to near 2-week high with the dollar index above the 77 mark. The dollar gained after Fed Chairman Ben Bernanke said there is no immediate risk to the currency.

Copper prices fell on the back of a rising dollar US manufacturing expanding at a slower than expected pace and China's factory output growing less than forecasted also dented sentiment.

Crude however traded flat around the USD 70 mark with support from decline in gasoline inventories and Iran's statements ahead of meeting today.