Reuters Wall Street sees worst day in a month

NEW YORK (Reuters) - U.S. stocks tumbled, marking

their worst slide in a month on Monday after regional manufacturing data dented optimism about the economy's health and resource shares fell alongside commodity prices.

After a series of signs the economy may be stabilizing, investors are looking for more definitive signals of its improving health. Analysts also said a pullback was unsurprising after a three-month rally.

Economists had expected to see slight improvement in the New York Fed's Empire State index, but the survey showed the factory sector shrank at a much more severe rate in June than the previous month.

"The bottom line is investors were starting to factor in a V-shaped recovery to the economy," said Alan Lancz, president of Alan B. Lancz & Associates Inc, in Toledo, Ohio.

"Not only do prices get ahead of themselves, but there's also a situation where if we don't get that V-shaped recovery, then you have more than just a temporary pullback. That's what might scare investors in the more immediate term."

Manufacturers' shares fell, including 3M (MMM.N), which was down 2.8 percent at $59.31, while Caterpillar (CAT.N) shed 4.3 percent to $36.12.

Oil prices fell from nearly an eight-month high after Russia expressed confidence in the U.S. dollar as the world's reserve currency, increasing the greenback's safe-haven appeal. Commodity prices and the dollar have moved inversely of late. Gains in the dollar makes oil more expensive for holders of other currencies. more...