US STOCKS-Wall Street reels under China shock
* China factory activity shrank in December
* Microsoft top drag on S&P, Goldman on Dow
* Indexes down: Dow 2.61 pct, S&P 2.59 pct, Nasdaq 3.14 pct (Adds details, changes comment, updates prices)
By Abhiram Nandakumar
Jan 4 (Reuters) - U.S. stock indexes tumbled more than 2 percent on the first trading day of 2016 - with the Dow losing more than 400 points - after weak Chinese economic data reignited fears of a global slowdown.
Surveys showed factory activity in the world's second-largest economy shrank sharply in December, sparking a 7 percent slide in Chinese shares that triggered a trading halt.
Adding to investors' worries, China's central bank fixed the yuan at a 4-1/2 year low, further weakening it against the dollar.
"Those are violent New Year fireworks. That's quite a way to start the day off," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
The Dow Jones industrial average was down 455.17 points, or 2.61 percent, at 16,969.86, set for its worst day in four months. Continuación...