Huge opening rout as manufacturing shudders worldwide

Small-cap stocks started out the new month with a bearish bang, sinking hard amid gloomy manufacturing data around the world, which weighed on industrial and commodity stocks. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was down 23.79, or 5.03%, at 449.35.

The dour tone on manufacturing started in Asia, where new orders for China’s manufacturing sector fell hard, stirring worries about the global recession. Then, the worries followed through to Europe and finally here to the United States, as the ISM Manufacturing Survey came in at 36.2, which was below the forecast of 38.0. In addition, the construction spending report was pegged at minus 1.2%, also below the projection for a dip of 0.9%.

Energy stocks were also an early drag on the market, taking a cue from sinking crude oil prices. The market for “black gold” was off nearly $4 a barrel this morning, pummeled by news that OPEC said they would wait to make a decision on further supply cuts and also by the troubling economic news around the globe.

The dollar was up about 0.5% against the euro, which also weighed on commodity prices this morning. Copper and aluminum prices were lower in Asian trading as those markets react to the China manufacturing news. Within the commodity realm, Brazilian stocks were off some 3% early today, as that country is heavily dependent on commodity exports.

Investors will be looking for news about how the holiday shopping season is moving along. The early returns seem positive for the “Black Friday” kickoff of the season after last Thursday’s Thanksgiving Day holiday, but the way the market is trading today suggests there might be some hidden weakness in those returns. Today is known as “Cyber Monday” as consumers scan the Internet for holiday bargains, and any feel for those returns could also be important as the day progresses.

From a money flow perspective, investors appeared to be fleeing stocks for safe-haven outlets in the credit markets. European bund futures hit contract highs . . .

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