Dow Jones: 11,984.61 (–228.48) S&P 500: 1,295.11 (–24.91) Nasdaq: 2,701.02 (–50.70)US STOCKS tumbled yesterday, giving the Dow Jones Industrial Average its biggest drop since August, as increases in jobless claims and the trade deficit and a slowdown in China's export growth spurred concern the economy may falter.

Caterpillar and United Technologies slumped at least 2.4 per cent, pacing declines among industrial companies.

Exxon Mobil and Chevron dropped at least 3 per cent as crude oil fell for a third day amid investor concern that fuel-demand will slow.

General Motors sank 2.6 per cent after the largest US automaker said Chief Financial Officer Chris Liddell will leave the company next month.

The Dow Jones industrial average fell 228.48 points, or 1.87 per cent, to end at 11,984.61.

The Standard & Poor’s 500 Index lost 24.91 points, or 1.89 per cent, to end at 1,295.11.

The Nasdaq Composite Index dropped 50.70 points, or 1.84 per cent, to close at 2,701.02.

Oil pared an earlier drop, falling 1.6 per cent to $102.76 a barrel, as the Associated Press reported that Saudi Arabian police opened fire at a rally.

“There are so many uncertainties that it’s hard to want to bid up this market,” said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion.

“On top of claims popping back up, there’s worsening in the trade deficit at a time when the emerging world is slowing down and the Middle East crisis creates an unpredictable environment for oil. To make matters worse, Spain gets downgraded, which is an indication that the European crisis may be far from being put to bed,” he said.

Stock futures fell before the open of exchanges as the labour department said applications for first-time unemployment benefits rose by 26,000 to 397,000 in the week ended March 5th. Economists forecast claims would climb to 376,000, according to the median estimate in a Bloomberg News survey.

Separately, the commerce department said the gap in goods and services increased 15 per cent to $46.3 billion in January as a surge in imports led by costlier crude oil overshadowed record exports. – (Bloomberg/Reuters)