US STOCKS-Wall St slumps more than 2 percent as China fears continue
* Seventythree pct of Dow, 67 pct S&P stocks in correction territory
* All 10 S&P sectors down; eight in the red for the year
* Energy stock hit as U.S. crude falls below $40/barrel
* Indexes down: Dow 2.3 pct, S&P 2.3 pct, Nasdaq 2.5 pct (Updates to late afternoon trading, changes byline)
By Chuck Mikolajczak
Aug 21 (Reuters) - U.S. stocks slumped late in the trading session on Friday as the S&P broke below the 2,000 level and the Dow slipped closer towards correction territory as fears of a China-led global slowdown continued to rattle investors.
A report overnight showed China's manufacturing sector shrank at the fastest pace since 2009, exacerbating worries about the health of its economy and whether the government would take further steps to stem its slowdown.
The Russell 2000 also entered correction territory on an intraday basis, a 10 percent decline from its most recent high, and was down more than 9 percent from its closing high on June 19.
The sell-off was broad based, with all 10 major S&P sectors in the red, with the energy sector one of the worst performers as U.S. crude oil dipped below $40 a barrel for the first time since the 2009 financial crisis. Eight of the 10 sectors were down more than 1 percent. The S&P energy index dropped 2.6 percent. Continuación...