Stocks slide on spike in oil prices

NEW YORK — Wall Street skidded lower Wednesday after a weaker-than-expected reading on the manufacturing sector and a spike in oil prices to $100 a barrel triggered concerns of a further slowdown in the overall economy.

The Dow Jones industrial average fell 220.86 to 13,043.96. The blue chips briefly fell below 13,000 for the first time since November.

Microsoft, one of the 30 Dow stocks, gave up 38 cents to close at $35.22 a share. Boeing, also a Dow stock, fell 84 cents to $86.62.

Broader stock indicators also fell sharply. The Standard & Poor's 500 index slid 21.20 to 1,447.16, and the Nasdaq composite index fell 42.65 to 2,609.63.

With the major indexes each losing more than 1 percent, it was the blue chip index's biggest point decline for the first day of trading in a new year.

The Institute for Supply Management's report that its manufacturing index fell to 47.7 percent for December from 50.8 percent in November raised concerns that the economy could be slowing at a quicker pace than some investors had estimated. The reading below 50 signals economic contraction, whereas readings over 50 indicate expansion. Analysts polled by Thomson/IFR had anticipated that manufacturing would expand modestly in December.

The economic reading and rising oil prices were unwelcome to investors wading into the first trading session of 2008 and indicated the concerns that weighed on stocks in the second half of 2007 will for now persist.

"It certainly is a soft number, and the declines in production and new orders are eye-catching," said Alan Levenson, chief economist at T. Rowe Price Associates. "Overall, the ISM has generally been a decent guide for the economy. This is a sharp decline in one month."