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After weak quarter, stocks weaken more

NEW YORK - U.S. stocks slid Thursday, a day after the market wrapped up its worst quarter in four years.

The Standard & Poor's 500 index slipped fell 13 points, or 0.7 percent, to 1,907 as of 12:56 p.m. Eastern time. The Dow Jones industrial average slid 156 points, or 1 percent, to 16,128, and the Nasdaq composite fell 43 points, or 0.9 percent, to 4,577.

Investors are looking ahead to Friday when the government releases its monthly report on jobs. Economists forecast that employers added 200,000 workers to their payrolls last month. Strong hiring would likely raise expectations that the Federal Reserve will increase its benchmark interest rate at its next meeting. Fed officials have said they expect to start raising rates before the end of the year.

Mounting concerns about slowing global economic growth and the timing of the Fed's first interest-rate hike in nearly a decade battered markets over recent months. The S&P 500, the most widely used measure of U.S. investments, has lost 8 percent in three months.

"It has been a painful experience, but that's what creates opportunities," said Tom Dinegan, an equity strategist at UBS Wealth Management. "I think there's more panic in the market than there is in the economy."

Not that the economy isn't showing some wear and tear. U.S. manufacturers expanded at their slowest pace in two years last month, held back by faltering global growth and cutbacks in oil and gas drilling.

The Institute for Supply Management says its index of factory activity fell sharply to 50.2 in September from 51.1 in August. That is the lowest level since May 2013. Any reading above 50 indicates expansion.

New orders and production both fell sharply and a measure of hiring also declined, according to the ISM, a trade group of purchasing managers. All three still barely remained in expansion territory.

U.S. manufacturers are getting hit by slower growth in China, the world's second-largest economy, and a stronger dollar, which makes U.S. goods more expensive overseas. The 15 percent rise in the dollar's value in the past year has also made imports cheaper compared with U.S.-made goods. Oil and gas drillers are also cutting back on their orders for steel pipe and other goods in the wake of sharply lower oil prices.

The report "is yet another illustration of the devastating impact that the strong dollar and weak foreign demand is having on the battered factory sector," Steve Murphy, an economist at Capital Economics, said. "Things might well get even worse before they begin to get better. Nevertheless, the ... incoming data on the rest of the economy are still incredibly upbeat."

Dunkin' Brands (DNKN) plunged 11 percent after it announced plans to shutter 100 Dunkin' Donuts stores around the country as sales slow. The company's revenue estimates also fell short of analysts' forecasts. Dunkin' Brands dropped $5.29 to $43.71.

Prices for U.S. government bonds rose, pushing the yield on the 10-year Treasury note down to 2.01 percent from 2.05 percent late Wednesday. The euro rose to $1.1204 while the dollar dipped to 119.62 yen.

Benchmark U.S. crude edged down 17 cents to $44.93 a barrel on the New York Mercantile Exchange. Brent Crude, the international benchmark, slipped 54 cents to $48.51 a barrel on the ICE exchange in London.

In Europe, Germany's DAX fell 1.8 percent, and France's CAC-40 rose 0.9 percent. The FTSE 100 index of leading British shares was unchanged.

An official measure of manufacturing in China rose in September, up from its lowest level in three years. China's economic growth held steady at 7 percent in the latest quarter ending in June.

"When it comes to China these days, as long as the figures are not terrible they are deemed to be respectable, and while the market is closed for holidays it will entice buyers back into the mix," said David Madden, market analyst at IG. Chinese markets are closed until the middle of next week.

Elsewhere in Asia, Japan's Nikkei 225 jumped 1.9 percent, South Korea's Kospi rose 0.8 percent, and Australia's S&P/ASX 200 advanced 1.8 percent.

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