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Surveys on factory activity showed a broad-based slowdown that began in May and deepened in June.
Major indexes opened lower after a poor reading on factory activity in New York, but turned higher around midday after getting better news on industrial production.
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Two closely watched barometers of factory activity released on Tuesday were at multi-year lows, reviving concerns about the state of the country's economy which caused a major sell-off on the world's financial markets last week.
Regional surveys of factory activity have suggested a weakening in orders this month, a trend that is likely to be highlighted in a report on national manufacturing next week.
On Monday a survey on U.S. factory activity suggested manufacturing stalled in July.
Weak data on home sales and factory activity on Thursday showed the economy stuck in a slow-growth gear.
A fall in jobs was a knock-on effect of the factory activity downturn, said Markit.
Other data on Thursday showed factory activity increased in the mid-Atlantic region during October, although not enough to suggest an end to broader weakness in factory output.
A separate report on Monday, however, showed factory activity in New York State accelerating in July, bolstering the view of economists that growth was likely to pick up soon.
Chinese stock markets tumbled 7% in their opening session of 2016 on Monday as weak factory activity surveys and falls in the yuan added to concerns about the struggling economy, forcing exchanges to suspend trade for the first time.
Reports Tuesday on home sales and factory activity were even wore than economists' dismal expectations, though investors seem to be saying conditions are as bad as they are going to get even as academics beg to differ.
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