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* Purchasing Managers Index expands to 51.3 vs est. 50.3
* Utilities top loser among S&P 500 sectors
* Indexes down: Dow 0.32 pct, S&P 0.39 pct, Nasdaq 0.32 pct (Updates to afternoon)
By Noel Randewich
Oct 3 (Reuters) - The fourth quarter got off to a weak start for U.S. stock investors on Monday, with banks and utilities pulling the S&P 500 lower.
Major indexes have bounced between gains and losses in the past few days, with investors nervous about the outcome of a tight race for the White House ahead of the Nov. 8 election.
Major banks extended recent declines as investors worried about the stability of Deutsche Bank and also Wells Fargo & Co's handling of sales abuses.
U.S-listed shares of Deutsche lost 2.3 percent as hopes faded of a swift deal with U.S. authorities over a multi-billion dollar penalty for mis-selling mortgage-backed securities.
"The feeling is there will be a negotiation lowering that penalty but it's certainly a bit of an overhang on the overall market," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
The S&P 500 financial index declined 0.53 percent as Wells Fargo slid 1.15 percent to its lowest since December, 2013.
Also weighing on investor sentiment was a plan announced by Britain on Sunday to start its separation from the European Union by March.
With yields on U.S. Treasury bonds up following stronger-than-expected manufacturing data for September, the interest-rate sensitive utility sector fell 1.35 percent.
The consumer staples index declined 0.63 percent, with Procter & Gamble falling 1.3 percent.
At 2:32 pm ET, the Dow Jones industrial average was down 0.32 percent to 18,249.36 points and the S&P 500 had lost 0.39 percent to 2,159.74.
The Nasdaq Composite dropped 0.32 percent to 5,294.75.
Tesla Motors jumped 4.9 percent after the electric carmaker said third-quarter deliveries rose by 70 percent to 24,500 cars.
Cabela's surged 14.9 percent after the retailer said it would be acquired by Bass Pro Shops in a deal valued at about $5.5 billion.
Declining issues outnumbered advancing ones on the NYSE by a 1.44-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored decliners.
The S&P 500 posted 10 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 64 new highs and 25 new lows. (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Frances Kerry)