Stocks on both sides of the Atlantic fell amid a flurry of disappointing economic data, including US retail sales and industrial production in the eurozone, underpinning concern about the outlook for corporate profits.
Commerce Department data showed that said US retail sales slid more than expected in October, dropping 0.3% after a 1.3% gain that was bigger than previously reported in September.
Then there is the uncertainty of the fiscal cliff overhanging the US economy.
President Barack Obama will begin budget negotiations with congressional leaders late tomorrow by calling for $US1.6 trillion in additional tax revenue over the next decade, far more than Republicans are likely to accept and double the $US800 billion discussed in talks with GOP leaders during the summer of 2011, according to the Wall Street Journal.
"The recent wall of worry continues to mount," Ryan Larson, Chicago-based head of US equity trading at RBC Global Asset Management (US), told Bloomberg News.
"Middle East geo-political tensions, continued sovereign concerns about Greece and Spain, indecision ahead of the fast-approaching fiscal cliff and the fact that the major US indices continue to trade under key technical levels are all weighing on sentiment."
In afternoon trading in New York, the Dow Jones Industrial Average fell 0.65%, the Standard & Poor's 500 Index dropped 0.46% and the Nasdaq Composite Index declined 0.34%.
Indeed, the mood in Europe was sombre too. The Stoxx 600 Index fell 0.9%. The FTSE 100 shed 1.1%, while both Germany's DAX and France's CAC 40 each closed down 0.9%.
The latest economic data only pointed to a further slowdown amid the ongoing debt crisis in the eurozone. The region's industrial production sank the most in more than three years in September, dropping a bigger-than-expected 2.5% from August, the EU's statistics office says.
Meanwhile, Greece's economy suffered a contraction for the 17th consecutive quarter, shrinking 7.2% in the third quarter from the same period last year.
There were pockets of optimism.
Shares of Cisco received a lift, last up 5.1%, from better-than-expected earnings.
Abercrombie & Fitch shares soared more than 27% after the teen clothing retailer lifted its full-year forecast.
And Facebook shares climbed 8.8%. The latest end to a restriction of share sales by former employees and those who sold at the initial public offering today nearly doubled the total number of shares publicly available, Bloomberg says.
"Some of the investors are thinking the worst is behind Facebook and now is maybe the time to go long on the stock," Victor Anthony, an analyst at Topeka Capital Markets in New York, told Bloomberg.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Eroad CEO Steven Newman on his company's revenue increase
- Nathan Smith discusses the latest foreign affairs news
- NZ Windfarms departing director Michael Stiassny speaks out after board exit
- James Mayo talks about SOS Hydration's growth plans after Snowball offer
- Michael Wood on whether he would run in Mt Roskill
- SAFE's Abi Izzard quizzed over protest of a caged hen operation at Pukekohe
- Nevil Gibson talks about Editor's Insight on the planned $US150 million merger between Pfizer and Allergan
- Taupo Beef’s Mike Barton on how to extract sustainable profit from farming
- Will the government lose on RMA reform? Rob Hosking outlines the PM's speech
- How could bookmakers recoup $16 million? Racing Board chief executive John Allen explains
- Nevil Gibson breaks down the latest aviation news
- BusinessNZ manager of energy, environment and infrastructure John Carnegie talks about the climate change survey