1st LD Writethru: U.S. stocks plunge on downbeat data

U.S. stocks fell sharply on Wednesday, with all the three major indices extending their losses into a third straight session, as data showed that U.S. manufacturing sector remained weak.

The Dow Jones Industrial Average tumbled 292.60 points, or 1.62 percent, to 17,718.54. The S&P 500 dropped 30.54 points, or 1.46 percent, to 2,061.05. The Nasdaq Composite Index slumped 118.21 points, or 2.37 percent, to 4,876.52.

New orders for manufactured durable goods in February unexpectedly decreased 3.2 billion dollars, or 1.4 percent, to 231. 3 billion dollars, well below market expectations of a modest gain, the U.S. Commerce Department said Wednesday.

"While we may see improvement in durable orders over the next several months, robust growth is not in the cards given the global economic situation. Weak foreign demand, tough competition from cheaper imports and lower commodity prices will continue to weigh on domestic manufacturers in the foreseeable future," said Jay Morelock, an economist at FTN Financial, in a note.

Dampening investor sentiment, overseas equities largely declined Wednesday. European shares decreased broadly despite better-than-expected data from Germany. In Asia, Chinese Shanghai Composite Index snapped its 10-day winning streak to end 0.83 percent lower, as China's manufacturing activity in March fell to an 11-month low of 49.2, according to HSBC's preliminary PMI.

In corporate news, H.J. Heinz, owned by P-E firm 3G Capital and Berkshire Hathaway, announced Wednesday that it had entered into a definitive merger agreement with Kraft to create The Kraft Heinz Company, forming the third largest food and beverage company in North America.

Heinz shareholders will own a 51 percent stake in the combined company, while Kraft shareholders will hold a 49 percent stake and receive a special cash dividend of 16.50 dollars per share. Shares of Kraft rocketed 35.62 percent to 83.17 dollars apiece Wednesday. Endite