Stocks fall on worrying economic news in China, US

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Worrying economic signals from China and the U.S. sent stocks sharply lower Wednesday. The Dow Jones industrial average sank 190 points.

Overseas markets also declined after an auction of German debt drew surprisingly little interest. Germany has Europe’s biggest economy and has been the main financial backer of bailouts for its smaller neighbors like Greece and Portugal. The wariness about German debt suggests that the crisis might be infecting the large nations that are doing the most keeping the euro currency afloat.

Borrowing costs for Italy and Spain rose from levels that already were already considered dangerously high. Europe lacks the resources to bail out those countries, which are the third- and fourth-biggest largest in the region.

Asian markets fell after a survey showed manufacturing slowing in China, the world’s second-largest economy. That came a day after the U.S. government lowered its estimate of third-quarter economic growth.

The Dow Jones industrial average fell 193 points, or 1.7 percent, to 11,300 at 11:15 a.m. Eastern.

Energy and materials companies had the biggest declines. IBM Corp. and Caterpillar Inc. lost the most among the 30 stocks in the Dow average.

The Standard & Poor’s 500 index dropped 22, or 1.9 percent, to 1,166. The index is headed for its sixth straight decline, the longest losing streak since August. Only a handful of companies in the index rose.

The Nasdaq composite index lost 52, or 2 percent, to 2,469.

The U.S. government released a mixed batch of economic reports before the market opened. Investors seemed focused on the negative aspects of the reports. Slightly more people applied for unemployment benefits last week, a sign that layoffs continue. However, the broader trend is positive. The four-week average fell for the eighth time in nine weeks.

Consumer spending grew by the least in four months. Incomes rose a bit more than expected. Also, orders for long-lasting manufactured products fell for a second month. The main culprit was a decline in commercial aircraft orders, which tend to be volatile.

Relatively few shares were traded as many U.S. market participants got an early start on Thursday’s Thanksgiving holiday. The market will be closed on Thursday and will have shortened hours on Friday.

In corporate news, Deere & Co. said strong sales of its farm equipment helped boost the company’s fourth quarter profit by 46 percent, beating Wall Street expectations. Deere stock rose 3.8 percent.

In Germany’s auction of 10-year bonds, buyers bid on only 60 percent of the 6 billion euros ($8.1 billion) up for sale. Part of the problem was the low interest rate, 1.98 percent, the lowest yield for 10-year bonds in the country’s history.

The dollar and prices for U.S. government debt rose as investors moved money into assets considered to be relatively safe. The dollar jumped about two cents against the euro to $1.33. The yield on the 10-year Treasury note fell to 1.93 percent, from 1.94 percent late Tuesday.

The U.S. government’s revision to third quarter economic growth helped knock stocks lower on Tuesday.

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Daniel Wagner can be reached at www.twitter.com/wagnerreports.