Stocks Continue Tailspin Amid Uncertainty Over Economy

Stocks plunged today as new data showed that the manufacturing sector is still very weak, heightening, once again, investor concerns about the outlook for an already sluggish economic recovery.

In the early afternoon, the three major indexes were down more than 3 percent, led lower by sharp drops in Citigroup, down 8.4 percent; General Motors, off 4.5 percent; Exxon Mobil, down 5.2 percent; General Electric, off 4.3 percent; Microsoft, down 3.2 percent, and Intel, off 4 percent.

The fall of the market on the first trading day in September, comes after the Dow Jones industrial average and the Nasdaq composite index finished August in the red, with both declining for the fifth consecutive month.

But as stocks fell, the bond market rallied and interest rates fell sharply, which could be good news. Lower interest rates make borrowing cheaper and could allow many homeowners to refinance their mortgages, giving them extra cash to spend. In early afternoon trading, the yield on the Treasury's 10-year note ( news - web sites) was at 3.9 percent. Except for a brief intraday trading dip below 4 percent in mid-August, the yield has not been this low since the early 1960's.