Stocks At Fresh Lows As Chicago Data Raise New Double-Dip Fears; Retailers Trim Sept. Views; Scenario gets new vigor as consumers get picky, deflation worries mount.(A)

Byline: JONAH KERI

Growing concern over the economy and warnings from several retailers slapped stocks Monday.

Futures projected a 1% loss before the open. Nasty surprises from the Chicago purchasing managers index heightened fear of a double-dip recession, triggering deeper losses.

The Nasdaq and S&P 500 each dropped as much as 3.3%, the Dow 3.1%.

Bargain hunters stepped in. But selling proved too intense late in the day. The Dow hit a four-year low, closing down 1.4%. The S&P lost 1.5%. The Nasdaq fell 2.3%, finishing less than 37 points off a six-year low. Volume rose.

The bad news started when the Chicago PMI came in at 48.1, below views in the low 50s. The Chicago data usually track closely with the national PMI data, due today. The new orders index slid to 49.2 from 55.8, putting growth in doubt. Readings under 50 signify contraction.

"The double-dip scenario is gaining credibility with some of the latest indicators," said Prudential Securities chief market strategist Ed Yardeni. He noted Friday's better-than-expected GDP and other Q3 data offered a cloudier view.