While you were sleeping: UPDATED Global stocks fall on Brexit, growth fears

Wall Street fell after steep declines in Europe and Asia amid new fears about the world economy and Britain's potential exit from the European Union (Brexit).

Polls show the Leave campaign is gathering momentum for the June 23 refrendum in the UK. 

In the US, investors are focused on the two-day Federal Open Market Committee meeting starting later today (Tuesday). Fed Chair Janet Yellen is set to give a press conference at the end of the gathering on Wednesday.

Both the Fed's statement and Ms Yellen's comments will be scrutinised for any clues about the timing of a rate rise.

At the close of trading, the Dow Jones Industrial Average was down 132.86 points, or 0.7%, to 17,732.48. The Standard & Poor's 500 Index fell 0.8% to 2079.06 and the Nasdaq Composite Index dropped 0.9% to 4848.44.

Microsoft buys LinkedIn for $US26.2 billion
Microsoft fell the most in the Dow industrials after the company agreed to buy LinkedIn for $US26.2 billion. Microsoft shares lost 2.6%, while LinkedIn surged 47% to $US192.40, just under Microsoft's $US196 a share offer.

"The LinkedIn team has grown a fantastic business centred on connecting the world's professionals," Satya Nadella, CEO of Microsoft, said in a statement.

"Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet."

Jeff Weiner will remain CEO of LinkedIn, reporting to Nadella, Microsoft said. Moody's Investors Service placed Microsoft's "AAA" rating under review for downgrade after the deal was announced.

"Particularly in the context of the proposed acquisition, further debt issuance to support capital returns would contribute to ratings pressure," Richard Lane, a Moody's analyst said in the statement, according to Bloomberg.

US Treasury yields fall to three-and-a-half year low
The benchmark 10-year Treasury note closed at the lowest level since December 2012, moving closer toward its record low set four years ago. The yield fell to 1.616% from 1.639% on Friday.

The Stoxx Europe 600 dropped 1.8% to its lowest closing level since February. The UK's FTSE 100 index declined 1.2%, while Germany's DAX index retreated 1.8% and France's CAC 40 index fell 1.9%.

Japan’s Nikkei Stock Average fell 3.5% as the yen surged to its highest levels against the euro and the UK pound since 2013.

"We are 10 days from the Brexit vote, and also days away from the election in Spain, while oil is lower and volatility is the highest in months," Plassard noted. "There are many uncertainties, so we could continue seeing declines and touch new lows in the days to come."

Oil prices slid. Brent crude futures traded 40USc lower at $US50.14 a barrel while US crude was down 40USc at $US48.67 a barrel.

"Bit of an inflection point for the oil markets right now with macro factors and the rising rig count weighing in on the negative sentiment while the Niger Delta Avengers are a good reminder that geopolitics will likely get worse before they get better," Michael Tran, director of energy strategy at RBC Capital Markets in New York, told Reuters.

Gold for June delivery rose 0.9% to $US1284.40 an ounce, supported by a softer dollar and demand for havens. The metal has risen for six of the past seven sessions, boosting its 2016 advance to 21%.

(BusinessDesk)