U.S. stocks and exchange trade funds (ETFs) opened the last day of the quarter in negative territory as discouraging manufacturing data fell far short of what economists had expected.

The Chicago Purchasing Managers Index, considered a precursor to the national Institute for Supply Chain Management Index, fell to 46.1 in September rather than rising to the 52 mark expected by economists.

Additionally, the Commerce Department said GDP, the broadest measure of the economy, sank at a pace of just 0.7% in the spring, beating analysts’ expectations of an annualized drop of 1.1%.  Although GDP numbers are promising, the Chicago PMI data is fresher, and reminded investors that the economy still has major obstacles to overcome before a solid recovery can occur, state Ieva M. Augstums and Tim Paradis of the Associated Press.

In the real estate arena, U.S. mortgage applications fell despite attractive loan rates.  The Mortgage Bankers Association said applications fell to a seasonally adjusted 2.8% in the week of Sept. 25, driven down by a 6.2% drop in demand for purchase loans and a 0.8% decline in refinancing requests.  The data further suggest that a rebound in the housing sector will be a slow one.  The iShares Dow Jones U.S. Real Estate (NYSEArca: IYR) was down 1.5% in morning trading.

In other news, a bit of hope loomed the air as the International Monetary Fund announced that likely losses from the global financial crisis through 2010 are going to be reduced by $600 billion to $3.4 trillion.  The IMF’s reassessment of the potential losses stemming from the financial crisis comes ahead of Thursday’s World Economic Outlook, when the fund will publish its latest estimates for the global economy, reports Carter Dougherty for The New York Times.

Overall, all three major U.S. indexes were down in morning trading with the Dow Jones Industrial Average giving up 0.9%, the S&P 500 dropping 0.9% and the Nasdaq down 0.8%.

For more stories on real estate, visit our real estate category.

Kevin Grewal contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.