US STOCKS-Wall St slumps as weak China data stokes growth fears

* China's manufacturing sector shrinks; US factory data weak

* Global growth likely weaker than expected-IMF's Lagarde

* Oil prices resume declines; Chevron (Swiss: CVX.SW - news) , Exxon down 4 pct

* Netflix (Xetra: 552484 - news) down on report of Apple (NasdaqGS: AAPL - news) mulling original shows

* Indexes down: Dow 2.46 pct, S&P 2.52 pct, Nasdaq 2.23 pct (Updates to early afternoon)

By Tanya Agrawal

Sept 1 (Reuters) - Wall Street slumped more than 2 percent on Tuesday, pushing all three major indexes into the red for the year, after weak data from China escalated fears that the slowdown in the world's second-largest economy will constrain global growth.

The sell off was broad. All 10 major S&P sectors were lower between 1.8 and 3.4 percent. All 30 Dow components were down between 1.5 and 4 percent.

Data early on Tuesday showed that China's manufacturing sector shrank at its fastest pace in three years in August. Later in the day, data showed that the pace of growth in the U.S (Other OTC: UBGXF - news) . manufacturing sector slowed in August to its weakest in over two years.

Adding to the nervousness, International Monetary Fund head Christine Lagarde said global economic growth was now likely to be weaker than had been expected just a few months ago.

The weak data pushed oil prices down more than 7 percent, snapping three days of gains, and also reduced the odds that the Federal Reserve would raise interest rates this month.

The S&P energy index declined 3.06 percent, with Chevron and Exxon down about 3 percent.

The financial index fell 3.39 percent, with JPMorgan , Wells Fargo (Hanover: NWT.HA - news) and Citigroup (NYSE: C - news) down 3-4 percent.

The CBOE Volatility index, known as Wall Street's "fear gauge", was up 10.4 percent at 31.41, above its long-term average of 20. The index had spiked to 53.29 last Monday.

"We haven't see this kind of volatility in a while. It reminds me of the one we saw during the 2008-2009 crisis," said Art Hogan, chief market strategist at Wunderlich Securities.

"But at some time the buyers will come."

At 12:50 ET (1650 GMT) the Dow Jones industrial average was down 406.81 points, or 2.46 percent, at 16,121.22.

The S&P 500 was down 49.72 points, or 2.52 percent, at 1,922.46 and the Nasdaq composite was down 106.41 points, or 2.23 percent, at 4,670.10.

Up to Monday's close, the S&P 500 had fallen 7.6 percent from its May high as the prospect of slowing global growth and an impending rate hike helped curtail a robust bull-run.

Some U.S. federal funds futures rose to session highs after the lower-than-expected U.S. factory data, implying traders raised their bets the Fed would raise rates even more slowly than they had previously thought.

Over the weekend, Fed Vice Chairman Stanley Fischer's comments appeared to indicate a rate hike in September was still in play despite the recent market volatility.

Netflix was down 8.5 percent at $105.34 after Variety reported that Apple was looking to move into the original programming business. Apple fell 2.6 percent to $109.81.

Dollar Tree (NasdaqGS: DLTR - news) fell 7.3 percent to $70.78 after its quarterly sales rose less than analysts had expected.

Declining issues outnumbered advancing ones on the NYSE by 2,601 to 417. On the Nasdaq, 2,175 issues fell and 611 advanced.

The S&P 500 index showed no new 52-week highs and nine new lows, while the Nasdaq recorded 10 new highs and 39 new lows. (Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty and Savio D'Souza)