By Riva Gold and Corrie Driebusch 

U.S. stocks resumed their slide Friday as disappointing economic data from China and the eurozone sparked a retreat by wary investors and traders who were hesitant to enter the weekend with big bets.

The steep drop at the end of the week has become a pattern: The Dow Jones Industrial Average's fall of more than 1.6% Friday would mark its third-steepest drop this month. The other two declines also came a day before the stock market was set to be closed.

Investors and traders say they are uneasy entering the weekend with large bets on the stocks in such volatile times. Adding to that discomfort: the frequent geopolitical developments over weekends when stock markets are closed.

"We have a political machine that's able to communicate any time of the day," said Andrew Slimmon, senior portfolio manager with Morgan Stanley Investment Management. "Who wants to take the risk that something comes up and you're long?"

The Dow Jones Industrial Average declined 420 points to 24178, and the S&P 500 fell 1.3%. The Nasdaq Composite dropped 1.2%. With those losses, the Dow industrials and S&P 500 are on track to end the week lower, while the Nasdaq Composite is still on pace to end the week with a gain of about 1%.

The declines, led by technology and other companies closely linked to the Chinese and global economy, signaled the weekslong choppiness in markets around the globe isn't over, despite a slight reprieve earlier in the week.

"It's been hard to avoid the damage in the markets the past couple weeks, " said Matthew Forester, chief investment officer at BNY Mellon's Lockwood Advisors. He said he has been favoring bonds with higher credit quality and longer durations, but it has been trickier to shift his stock holdings due to the all-inclusive nature of the selling.

Friday's losses followed a similar pattern, with real-estate and utilities shares posting smaller declines than other sectors. They tend to be favored by investors in volatile times for their steady payouts.

Health-care companies were among the worst performers as Johnson & Johnson slumped nearly 9% after Reuters reported the company knew for years that its baby powder sometimes contained asbestos. The drop took about 80 points off the Dow industrials and pushed the S&P's health-care sector down 3%.

Energy stocks in the S&P 500 declined 1.7% as oil prices resumed their slide. U.S. crude dropped 2.7% to $51.18 a barrel.

Friday's selling came as data showed China's economic downturn deepened last month more than economists expected, as Beijing works to halt a slowdown while grappling with a trade conflict.

Official figures showed a November slowdown in industrial production amid issues among auto makers and property markets, while growth in retail sales dropped to its lowest level in more than 15 years.

"For a while, the Chinese economy was the extra bit that kept the global total going," said Alastair Winter, chief economist at Daniel Stewart & Co. "I do think the Chinese economy is slowing quite a lot," he added, noting that is one reason Germany's benchmark DAX index in total return terms is down more than 20% from its peak in January.

Mao Shengyong, a spokesman for China's National Bureau of Statistics, said China's economic growth was nonetheless on track to achieve its annual target in 2018.

Hong Kong's Hang Seng Index fell 1.6%, while the Nikkei Stock Average lost 2%. Declines spread to European markets, where the Stoxx Europe 600 lost 0.5%.

Adding to the downbeat tone Friday, purchasing managers' surveys separately showed that French business activity unexpectedly contracted for the first time in 2 1/2 years, according to IHS Markit, while German's composite purchasing managers index reached its lowest level in four years.

That came a day after the European Central Bank cut its economic growth forecasts, highlighting the climate of uncertainty around trade tensions and market volatility.

Worries about world growth and trade relations have contributed to steep swings in stock and bonds markets recently, even as the U.S. economy has been relatively steady.

The concerns have sparked a broad retreat from risky assets. In the week through Wednesday, investors withdrew record amounts from global equity funds, according to EPFR Global.

Friday's moves came after world stocks had rebounded earlier this week as The Wall Street Journal reported that China was set to introduce an industrial policy that is friendlier to foreign businesses. President Trump said on Twitter earlier in the week that "productive" trade talks were under way.

"Markets are behaving as if everything depends on U.S.-China trade," said Yogi Dewan, chief executive at Hassium Asset Management.

Many economists expect the trade conflict to continue despite a 90-day tariff truce that Mr. Trump and his Chinese counterpart, Xi Jinping, reached in early December.

Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

December 14, 2018 13:34 ET (18:34 GMT)