US stocks fell for a second day today and gauge of investor concern hit its highest in two months after reports cast doubt over the health of the US and euro-zone economies.
The latest bout of selling came after data showed the number of Americans filing new claims for unemployment benefits rose last week while consumer prices were flat in January.
In Europe, a surprisingly weak euro zone Purchasing Managers Index (PMI) data for February dashed hopes of an early recovery for the recession-hit region.
The combination of factors put the MSCI world equity index on course for its biggest daily loss of year.
The Dow Jones industrial average dropped 53.87 points, or 0.39 percent, to 13,873.67. The Standard & Poor’s 500 Index fell 10.30 points, or 0.68 percent, to 1,501.65. The Nasdaq Composite Index lost 35.08 points, or 1.11 percent, to 3,129.33.
The S&P 500 index dropped 1.2 percent on Wednesday, its biggest decline since November 14, after minutes from the US Federal Reserve’s most recent meeting suggested the central bank may slow or stop buying bonds sooner than expected.
The benchmark S&P index is down 1.9 percent in the past two sessions but is still up more than 5 percent for the year, leading many analysts to view the Fed minutes as one of the triggers for an overdue pullback in equities, along with the upcoming sequestration in Washington and a decrease in consumer spending.
Europe’s Eurofirst 300 index shed 1.3 percent, close to its biggest daily loss of the year so far, while London’s FTSE 100, Paris’s CAC-40 and Frankfurt’s DAX were as much as 1.8 percent lower.
Japan’s Nikkei share average fell as financials and exporters dropped, tugging the market below a 52-month high hit the previous day, with investors’ risk appetite also dampened by declines in US shares.
The Nikkei closed 1.4 percent lower at 11,309.13 after rising to 11,468.28, marking its highest closing level since late September 2008.
Financials were sold-off. Mitsubishi UFJ Financial Group fell 2.4 percent, Sumitomo Mitsui Financial Group shed 2.8%, while Mizuho Financial Group and Nomura Holdings Inc declined 2.0 percent each. They were among the top six most actively traded stocks by turnover on the main board.
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