US STOCKS-Wall St tumbles on China fears; Dow confirms correction
* 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 3.1 pct, S&P 3.2 pct, Nasdaq 3.5 pct (Updates to market close)
By Chuck Mikolajczak
Aug 21 (Reuters) - The S&P 500 suffered its biggest daily percentage drop in nearly four years on Friday and the Dow confirmed it had entered into correction territory as fears of a China-led global slowdown rattled investors around the world.
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 index of small-cap stocks also confirmed a move into correction territory, a 10-percent decline from its most recent closing high on June 23.
The S&P slumped 5.8 percent for the week, its biggest weekly percentage decline since September 2011.
"People are using China as the main thing as an excuse for selling," said Keith Bliss, senior vice-president at Cuttone & Co in New York. Continuación...