* Fresh concerns over economy spark selloff
* Lower commodity prices hit resource shares
* Goldman Sachs downgrades Wal-Mart, stock slides
* Dow off 2.4 pct, S&P off 2.7 pct; Nasdaq off 2.9 pct (Updates to midafternoon, changes byline)
By Leah Schnurr
NEW YORK, June 15 (Reuters) - U.S. stocks fell broadly on Monday as regional manufacturing data dented optimism about the economy's health and resource shares fell alongside commodity prices.
Economists had expected to see slight improvement in the New York Fed's "Empire State" index, but the survey showed the factory sector shrank at a more severe rate in June than the previous month. After a series of signs the economy may be stabilizing, investors are looking for more definitive signals of its improving health.
"The New York manufacturing index hinted that the improvement in economic data may be slowing down after the rapid recovery we've seen over the past one to three months," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
The stronger U.S. dollar helped pull the price of oil below $70 a barrel from a near eight-month high. The decline hit energy companies' shares, including Chevron, down 3 percent at $70.50. The S&P energy index slid 3.3 percent.
The S&P 500 eased off gains of about 40 percent from March's 12-year low, but was still up about 36 percent from that trough.
The Dow Jones industrial average fell 210.25 points, or 2.39 percent, to 8,589.01. The Standard & Poor's 500 Index slid 25.74 points, or 2.72 percent, to 920.47. The Nasdaq Composite Index gave up 53.23 points, or 2.86 percent, at 1,805.57.
While the recent run-up in commodity prices had helped stocks extend their rally, there has also been concern that a surge in oil and other commodities could hamper any budding economic recovery. Higher energy costs are a drag on consumer spending and corporate profits.
Also dampening sentiment, Goldman Sachs cut its rating on Wal-Mart Stores Inc to "neutral" from "buy," saying it did not see a lot of positive catalysts to drive shares higher in the near-term as expense pressures and tougher sales comparisons persist.
The Dow component fell 2.9 percent to $48.42, and was among the top drags on the index. The S&P's retail index fell 2.3 percent.
Technology shares, which have been among the biggest gainers in the three-month market rally, also fell heavily as investors took profits. The PHLX semiconductor index fell 2.2 percent. Shares of tech bellwethers, such as Qualcomm Inc, down 4.4 percent at $44.04, led the Nasdaq lower.