Disappointing Manufacturing Activity Sends Markets Tumbling

The markets extended its losses during the midday with the Dow dropping 94 points to 12,048 despite a Congressional compromise on a debt deal as investors focused on sharply lower growth in manufacturing activity. Nasdaq plunged 32 points to 2724.

On the upside

Sycamore Partners acquired a 9.9% stake in Talbots (NYSE: TLB) saying that the women's apparel retailer was undervalued.

Old National Bancorp (NYSE: ONB) reported sharply higher second quarter earnings that topped analyst estimates.

Infinera (Nasdaq: INFN) and pan-African telecommunications provider SEACOM successfully transmitted five 100 Gigabit per second coherent optical signals in Africa over a distance of 1732 kilometers.

On the downside

Sohu.com (Nasdaq: SOHU) reported higher second quarter earnings and revenue that beat analyst expectations and forecast third quarter revenue ahead of estimates but the stock price tumbled.

Shares of Kindred Healthcare (NYSE: KND) tumbled after the Centers for Medicare & Medicaid Services announced on Friday an 11.1% cut for skilled nursing facilities reimbursements in 2012.

Shares of Miller Petroleum (NYSE: MILL) continued falling after a Seeking Alpha article questioned company accounting practices last week.

In the broad market, declining issues outpaced advancers by a margin of nearly 5 to 3 on the NYSE and by nearly 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks tumbled 10 points to 786.