Expectations of a firm start on Wall Street were quickly dashed by a disappointing manufacturing Purchasing Managers' Index (PMI) report for September.
The PMI declined to 50.2 from 51.1, and although a value above 50 still indicates expansion, economists had been expecting the fall to be more gentle to around 50.8.
Indices quickly turned south with the Dow Jones off 43 points at 16,242, the S&P 500 down three points at 1,918 and the NASDAQ Composite 20 points weaker at 4,601.
Retailer Gap (NYSE:FPS) remains under pressure, down 1.7% at US$28.01, after the boss of its most successful marque - Old Navy - defected to Ralph Lauren.
Dunking' Brands Group (NASDAQ:DANK) tumbled in morning trades after the coffee and don’t retail chain issued a downbeat full-year profit outlook.
Shares fell 10.8% to $43.71, the lowest intra-day price since January 2, as the company said it expects full-year 2015 earnings per share of $1.87 to $1.91, which is below the $1.92 average estimate of 28 analysts polled by Capital IQ.
Tech giants Google (NASDAQ:Google) and Microsoft (NASDAQ:MSFT) were both marginally out-performing the market after ending a long-running patent dispute.
They have agreed to drop some 20 lawsuits between them, relating to relating to software powering smartphones.
Google rose 58 cents to US$638.95 while Microsoft was little changed.
Elsewhere in the technology world, Twitter (NYSE:TRW) is reportedly going back to the future, appointing founder and current interim boss Jack Dorset as its new chief executive.
Shares shed 5.2% at US$25.56.
Tractor maker Deere (NYSE:DE) was friendless, despite a tentative agreement being reached with the United Auto Workers Union to replace an accord that had expired.
The shares reversed 1.9% to US$72.60.