U.S. stocks followed world markets lower Tuesday morning after worrisome economic data out of China, whose blistering economy helped sustain global growth during the economic downturn.
Asian stocks fell sharply after a report that home prices dropped in 45 Chinese cities last month, a result of government policies designed to reduce property speculation. Mining giant BHP Billiton said it expects weakening Chinese demand for iron ore used in steelmaking.
Later, the U.S. Commerce Department released a mixed report on the housing market. Builders broke ground on fewer homes in February, though they obtained more permits to build homes later in the year.
A mild winter allowed builders to keep working in most parts of the country. And an improving job market has economists slightly more optimistic about home sales this year.
But any bright spots in the housing report were overshadowed by concerns about China.
The Dow Jones industrial average fell 85 points, or 0.6 percent, to 13,153 in the first 45 minutes of trading. The Standard & Poor’s 500 index fell seven points to 1,402. The Nasdaq composite index lost 19 to 3,059.
Among the Dow’s biggest losers was Caterpillar, which dropped 2 percent after saying that its global sales are growing more slowly.
Mining companies, which have increasingly relied on rising demand from the developing world, plunged after BHP Billiton’s grim report on Chinese demand. Cliffs Natural Resources Inc. dropped 4 percent, Peabody Energy Corp. 6 percent and U.S. Steel 2 percent.
The losses were broad, hitting nine of the S&P 500’s 10 industry groups. The one group to gain was utilities, which tend to offer safe, modest returns even when the economy is sluggish.
European indexes are falling as well. Germany’s DAX fell 1.5 and France’s CAC-40 was 1.4 percent lower. The FTSE 100 index of leading British shares was down 1.3 percent.
Among the companies making big moves on Tuesday:
— Jeweler Tiffany & Co. jumped 8 percent after the company said it expects profits and revenue to rise in 2012, despite weaker earnings in the fourth quarter.
— Adobe Systems Inc. fell 2 percent after the software maker said that its fiscal first-quarter profit fell sharply as operating costs rose.