By Sue Chang and Anora Mahmudova, MarketWatch

Analyst sees little relief for market other than technical support

The Dow Jones Industrial Average kicked off August with a triple-digit tumble, as investors fled risky assets such as global equities Tuesday following a fresh set of weak Chinese economic data.

China's official manufacturing purchasing managers index fell to a three-year low (http://www.marketwatch.com/story/china-factory-activity-slips-to-3-year-low-2015-09-01), triggering a wide selloff in stocks across Asia (http://www.marketwatch.com/story/chinese-factory-data-pull-asian-shares-lower-2015-09-01) and Europe (http://www.marketwatch.com/storyno-meta-for-guid) that then spread to the U.S.

The S&P 500 sank 48 points, or 2.5%, to 1,923, with all of its 10 main sectors trading in the red. The Dow Jones Industrial Average lost 401 points, or 2.4%, to 16,126. All 30 of its components were trading lower.

The Nasdaq Composite slumped 105 points, or 2.2% at 4,670, falling into negative territory for the year.

"The market is being driven by emotion," said Robert Pavlik, chief market strategist at Boston Private Wealth LLC, who sees very little relief ahead for the market other than from a technical perspective.

"Support [for the S&P 500] is expected to emerge at 1,927. The ability to hold that level is the key," said Pavlik.

But if strong buying fails to materialize at 1,927, the S&P 500 could fall to 1,877 in the near term, he said. Pavlik also characterized the recent selloff as a self-fulfilling prophecy.

"People had been expecting a correction for a while and when everything hit the fan with news out of China, it's like their biggest fear had come true," he said.

Read:'Death cross' patterns spread to all corners of the stock market (http://www.marketwatch.com/story/death-cross-patterns-spread-like-a-bearish-virus-2015-08-28)

The CBOE Volatility Index jumped to 31.14, where it has hovered at for the past eight trading sessions.

When the Vix is above 20, as it is now, uncertainty is a prevailing theme among frightful stock investors and wild swings in the index can be expected, said Randy Frederick, managing director of trading & derivatives at Schwab Center for Financial Research.

"While today's losses are sharp, they are not as bad as last Monday's when the Dow plunged 1,000 points. So, we are not seeing panic selling, it's a lot calmer, relatively speaking," he said.

Big swings in oil prices added to already volatile markets. Oil futures dropped sharply after a three-day rally, sending energy stocks sharply down.

Read:Drivers to pay lowest Labor Day gas prices in 11 years (http://www.marketwatch.com/story/drivers-to-pay-lowest-labor-day-weekend-gas-prices-in-11-years-aaa-2015-09-01)

"The summer weakness [in China] could be linked to the recent Tianjin port explosion and large-scale factory closures in Beijing ahead of the WWII victory day parade on 3 September," analysts at Barclays said in a note.

"Even so, we believe the multiyear-low PMI confirms that the economy is still not on a solid footing, and we look for a flat growth profile during the rest of 2015, with continued downside risks," they added.

On Monday, Goldman Sachs forecast China's economic data will remain pressured (http://www.marketwatch.com/story/goldman-slashes-chinas-economic-growth-targets-2015-08-31) in August, as Beijing planned to curtail construction and production from Aug. 20 through this Friday to improve air quality.

U.S. data: The final Markit manufacturing reading for August fell to 53.0 from 53.8 in July

The Institute for Supply Management said its manufacturing index (http://www.marketwatch.com/story/us-manufacturing-growth-weakest-since-mid-2013-ism-says-2015-09-01)dropped to 51.1% last month from 52.7% in July, falling short of the 52.2% forecast of economists surveyed by MarketWatch.

Meanwhile, outlays for U.S. construction projects (http://www.marketwatch.com/story/us-construction-spending-jumps-07-in-july-to-highest-level-in-seven-years-2015-09-01)rose 0.7% in July to a seasonally adjusted annual rate of $1.08 trillion, the highest level since May 2008, the Commerce Department reported Tuesday.

Movers and shakers: Dollar Tree Inc.(DLTR) shares tumbled more than 7% after the discount chain's second-quarter earnings missed analysts' estimates.

Oil-related companies were among biggest decliners as crude oil fell almost 7% (http://www.marketwatch.com/story/oil-prices-pull-back-after-breathless-rally-2015-09-01-3103369). Shares of Chevron Corp.(CVX) and Exxon Mobil Corp.(XOM) were down sharply while energy was the worst performing sector in the S&P 500.

Read:Brutal rout for Dow, S&P 500 creates winners, losers among hedge funds (http://www.marketwatch.com/story/brutal-rout-for-dow-sp-500-creates-winners-and-losers-2015-09-01)

Other markets: U.S. Treasurys rallied, sending the yield on the 10-year note down 4 basis points to 2.18%, while gold inched up 0.6% to $1,139.40 an ounce as investors flocked to havens.

The greenback traded mixed against other major currencies (http://www.marketwatch.com/storyno-meta-for-guid), with the ICE dollar index off 0.4% at 95.40.

Sara Sjolin contributed to this article.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

September 01, 2015 14:33 ET (18:33 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.