US stocks - S&P falls 3% as stocks extend losses

The S&P 500 falls more than 3 per cent on Tuesday after investors were spooked by data showing the vast services sector contracted in January.

The S&P 500 fell more than 3 per cent on Tuesday after investors were spooked by data showing the vast services sector contracted in January to a level not seen since 2001 when the US economy was in recession.

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The Dow Jones industrial average was down 343.53 points, or 2.72 per cent, at 12,291.63. The Standard & Poor's 500 Index was down 41.37 points, or 3.00 per cent, at 1,339.45. The Nasdaq Composite Index .IXIC was down 67.17 points, or 2.82 per cent, at 2,315.68.