Market rally reverses after ‘shockingly weak' US data

US markets have reversed earlier gains after manufacturing data raised further doubts about the strength of the economic recovery.

Wall Street opened strongly on the news the US is close to agreeing a deal to raise the debt ceiling, but a near 100-point rise in the Dow Jones index disappeared after the publication of ISM manufacturing data. The data revealed the headline ISM index had fallen from 55.3 in June to 50.9 in July, its lowest level since the end of the US recession in 2009 and well below market expectations. Major indices dropped on the news: at 10:30am Eastern Daylight Time the Dow was down 36 points, or 0.3% at 12,106, while the S&P 500 had fallen 0.6% to 1,285. The FTSE 100 fell 90 points on the new...