Manufacturing sector growth declines in October

U.S. manufacturing index declined to 50.8 in October, from 51.6 in September, the Institute for Supply Management said on Tuesday, as sales overseas declined on weaker consumer spending. Still, reading above 50.0 indicates industry expansion.

"There are concerns that manufacturing in Europe and China are showing signs of softening, and that could potentially feed into the U.S.," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in New York. "The markets seem to be more worried about the European sovereign debt crisis. We'll likely struggle to surpass third quarter GDP growth."

"The details don't look as bad as the headline. More broadly, the deterioration in sentiment has led businesses to manage conservatively. You have the euro zone situation lurching from bad to worse. There is a bunker mentality. Businesses are keeping inventories lean," said Richard Dekaser, an economist at the Parthenon Group in Boston.