Stocks on Wall Street finished below 10,000 on the Dow, reversing a rebound on world markets.
Share traders remained spooked by Europe's debt problems, outweighing a run of positive domestic economic news.
The Dow Jones Industrial Average closed 69.30 points, or 0.7%, down at 9974.45, the lowest close since February.
Earlier, the index was up 135 points after durable-goods orders rose more than expected in April, driven by a jump in aircraft demand.
The Nasdaq Composite lost 0.35% to 2195.88, while the S&P 500-share index dropped 0.6% to 1067.95.
The telecommunications sector was hurt by a 0.6% slide in Verizon Communications after the company warned that a US Federal Communications Commission's regulatory proposal could be "dangerous to the overall health of the industry."
Other markets: Europe, Asia up
European stocks closed higher as investors nervously waded back into the market to pick up battered stocks, reversing some of Tuesday's sharp losses.
The uptick built on the late rebound in the US that carried over into Asian trading.
The pan-European Stoxx 600 index closed up 2.4% at 237.74, recovering from the eight-month lows on Tuesday.
The UK's FTSE 100 ended up 2% at 5038.08, Germany's DAX gained 1.6% to 5758.02 and France's CAC-40 finished 2.3% higher at 3408.59.
Asian stock markets rebounded with shipping and resource companies leading the charge on upbeat freight rates and a rise in commodity prices.
Korean stocks overcame choppy trading to end higher after a steep fall in the previous session on rising political tensions with the communist North.
Japan's Nikkei Stock Average climbed 0.7% to 9522.66, Australia's S&P/ASX 200 advanced 1% to 4307.19, Hong Kong's Hang Seng Index gained 1.1% to 19,196.45, Korea's Kospi climbed 1.4% to 1582.12 and India's Sensex gained 2.3% to 16,387.84.
Indonesia's JSX Composite soared 7.3% to 2696.78 on bargain buying after slumping more than 11% in the previous five sessions.
Among resource shares, BHP Billiton climbed 2.7% and Rio Tinto jumped 3.6%, while PetroChina climbed 3% and Aluminum Corp of China rose 2.7% in Hong Kong. Among commodities traders, Mitsubishi climbed 3.1% and Mitsui added 3.6% in Tokyo.
Shipping stocks also rose after a sharp jump in the Baltic Dry Index. Mitsui OSK Lines rose 5%, STX Pan Ocean surged 8.5% and Korea Line added 5.4%, China Cosco Holdings advanced 3.7% and Neptune Orient Lines climbed 2.3% in Singapore.
Commodities: Oil, gold up
Oil futures jumped after a government report showing stable refined product inventories and rising demand, providing more fuel for a rally already under way.
Light, sweet crude for July delivery traded $US2.53, or 3.7%, higher at $US71.28 a barrel in New York. Brent crude on the ICE futures exchange traded $US2.21, or 3.2%, higher at $US71.76 a barrel.
Gold futures climbed back above $US1200 an ounce as investors keep turning to the metal for safety due to worries about European sovereign debt and tensions on the Korean peninsula.
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose $13.50, or 1.1%, to $1,211.50 an ounce. Currencies:
Currencies: Euro down
The euro declined against its major rivals in volatile trading, on worries that a sovereign-debt crisis could infect the region's financial sector.
The common currency has lost about 1% on the day against the dollar, UK pound and yen.
The euro at one point touched a two-week low versus the pound and briefly dropped under $US1.2200, putting it within striking distance of its recent four-year low at $US1.2143.
The euro is at $US1.2222 from $US1.2334 late on Tuesday. The dollar is at ¥90.21 from ¥90.12, while the euro was at ¥110.28 from ¥111.16. The UK pound was at $US1.4417 from $US1.4399.
Thu, 27 May 2010