NEW YORK (AP) — Stocks are lower on more signs that China's economy is weakening and Europe is slowing.

Oil prices dropped 2 percent to their lowest level in a week after the reports of a possible global slowdown. That hurt oil stocks: Alpha Natural Resources, Consol Energy and Cliffs Natural Resources were all down 4 percent.

The disconcerting news from overseas Thursday overshadowed reports showing the U.S. economy is gaining momentum.

The Dow Jones industrial average fell 80 points to 13,045 shortly before noon eastern. The Standard & Poor's 500 index fell 11 points to 1,391, while the Nasdaq composite fell 15 points to 3,059.

China's manufacturing sector is contracting, according to a report. Another survey in Europe also showed signs of a slowdown there in services and manufacturing.

Another survey in Europe also showed signs that the economy was slowing there. The survey from financial information company Markit's purchasing managers' index, which combines both the services and manufacturing sectors, fell to a below-forecast 48.8 points in March from 49.3 a month earlier.

In the U.S., the number of people seeking unemployment benefits fell 5,000 to a four-year low last week, bolstering the view that the job market is strengthening.

The news from China and Europe also dwarfed FedEx Corp.'s report that its quarterly profit more than doubled between December and February after it shipped more packages and charged higher prices. The world's second-largest package delivery company only bolstered worries about a global slowdown, when chief financial officer Alan Graf said the current economic environment and higher fuel prices are driving more customers to "trade down" or choose slower methods of shipping to save money, just like they did during the recession.

FedEx's predicts a slightly slower economic growth rate in the U.S. and abroad than most economists. Its stock fell 2.5 percent.

While news out of China has been bad for stocks, it may provide some relief to consumers. Oil prices are falling 2.6 percent Thursday morning. Gasoline has risen 59 cents per gallon since Jan. 1 and the average price nationwide is above $4 in at least eight states, plus the District of Columbia. Energy stocks were lower — Alpha Natural Resources Inc. and Consol Energy Inc. were both down 3 percent.

In other corporate news:

— Watson Pharmaceuticals Inc. jumped 4.3 percent on reports the generic drugmaker is in talks to buy European counterpart Actavis for about $7 billion.

— GameStop Corp. was up over 2 percent after video game retailer said it would keep expenses down in the coming year by opening fewer stores, even though its profit in the previous quarter fell over 25 percent.

— Discover Financial Services stock rose 2 percent, a day after it reported a 36 percent jump in its first-quarter profit. Customers used its credit card more and racked up higher balances but also improved their payment habits.