The Dow Jones industrial average is sinking after a key manufacturing index dropped sharply in July.

The Dow is down 58 points, or 0.5 percent, to 12,085 shortly after the manufacturing report came out at midmorning. It had been up as much as 139 points.

The Institute of Supply Management said its manufacturing index fell to 50.9. That was barely above the 50 point figure that indicates growth. Economists had been expecting a much higher reading of 55.

The Dow rallied in early trading Monday after President Barack Obama and Congressional leaders announced that they had reached a deal to raise the nation's borrowing limit ahead of a Tuesday deadline. The deal must still get passed in Congress.