U.S. markets slump on China economic woe

News that auto sales are softening in China

News that auto sales are softening in China sent U.S. markets down Monday morning, despite evidence that the Federal Reserve will step in again to strengthen the American economy. These traders were on the floor of the New York Stock Exchange this past week. (Sept. 6, 2012) Photo Credit: AP

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Stocks slipped on Wall Street as troubling economic news from China and the U.S. outweighed optimism about more stimulus from the Federal Reserve.

The Dow Jones industrial average fell 52.35 points to close at 13,254.29 Monday. The Standard & Poor's 500 slipped 0.61 percent to 1,429.08 and the Nasdaq composite fell 1.03 percent to 3,104.02.

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The S&P 500 and Nasdaq were dragged down more than the Dow by a drop in Apple's stock, the largest component of both indexes. Apple, which is expected to announce its new iPhone on Wednesday, fell $17.70, or 2.6 percent, to $662.74.

The stumble marks a pause in a rally last week that took the Dow and the S&P 500 to their highest levels in more than four years.

Investors hope that the Fed will act this week to support the U.S. economy. The monetary policymaking body of the Federal Reserve meets on Wednesday and Thursday. Many anticipate a third round of bond purchases or other support for the financial system.

The Fed also reported Monday that Americans cut back on their credit card use in July for the second straight month, suggesting many remain cautious in the face of high unemployment and slow economic growth.

China reported that auto sales growth slowed in August and imports shrank unexpectedly, giving investors more reason to worry.-- AP

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