NEW YORK (TheStreet) -- The S&P 500 recovered from session lows on Wednesday in a breakneck session which saw the benchmark index trading as high as 2,072 at market open. Indications of weakness in manufacturing caused jitters on Wall Street, undermining earlier positive sentiment following the conclusion of 2014 trading, the stock market's third consecutive annual gain.

The S&P 500 (SPY) - Get Report slid 0.23% to 2,054. The Dow Jones Industrial Average (DIA) - Get Report fell 0.12% and the Nasdaq (QQQ) - Get Report tumbled 0.37%.  The small-cap-focused Russell 2000I:RUT tanked more than 1%.

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Shares moved lower after growth in the manufacturing sector slowed to a six-month low of 55.5 in December, down from 58.7 a month earlier, according to the Institute for Supply Management. Economists had expected a reading of 57.6. Construction spending fell 0.3% month on month, below forecasts for an increase of 0.6%.

"Overall, however, the data continues to show that despite some deterioration in momentum heading into year-end, manufacturing sector growth is showing a solid handoff into 2015," TD Securities' strategist Gennadiy Goldberg said in a note.

West Texas Intermediate crude fell 1% to $52.76. Oil has seen a volatile session so far, jumping as much as 3.5% before plunging 2.3%. The commodity has suffered gaping losses as global oversupply faces tepid industrial demand in key international markets, such as China.

Major European markets were lower after eurozone manufacturing PMI showed continued weakness in December. A final reading of 50.6 was a touch lower than the flash estimate, but improved upon November's 50.1 reading.

"Eurozone factory activity more or less stagnated again in December, said Markit chief economist Chris Williamson. "The weakness of factory output, combined with the subdued service sector growth signalled by the flash PMI, suggests the eurozone economy grew by just 0.1% in the fourth quarter."

Germany's DAX closed 0.42% lower, France's CAC40 fell 0.48%, and London's FTSE dropped 0.28%.

Casino stocks were selling off after Macau casino revenue fell 2.6% over 2014, its first-ever drop since records began in 2002. MGM Resorts (MGM) - Get Report , Las Vegas Sands (LVS) - Get Report and Wynn Resorts (WYNN) - Get Report were all trading lower.

Rite Aid (RAD) - Get Report shares were climbing 1.3% after the drugstore chain reported a 5.3% jump in same-store sales in December, while pharmacy sales gained 7.3%.

Harvest Natural Resources (HNR) plummeted more than 48% after terminating the sale of Venezuelan assets citing lack of local government approval. The petroleum company had previously warned its future liquidity was dependent on the sale's completion.

Ballard Power Systems (BLDP) - Get Report announced the termination of two licensing agreements in China, a move it said will impact its full-year results. The alternative energy provider said it will not achieve 20% revenue growth over 2014 as previously guided. Shares were down 8.8%.

Brainstorm Cell Therapeutics (BCLI) - Get Reportcontinued to rally, up more than 51%, after Wednesday's news of positive clinical trial results for its ALS treatment. Shares spiked 22.7% on Wednesday.

Synaptics (SYNA) - Get Report shares were trading 7.2% lower after Pacific Crest downgraded to "sector perform" on growing competition in the fingerprint sensor and touch controller business.

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-- Written by Keris Alison Lahiff in New York.