NEW YORK Some disappointing U.S. earnings, including Amazon.com, and weak German economic data pressured world stock markets on Friday, while the euro hit an eight-month low against the U.S. dollar.
Amazon was the biggest drag on the S&P 500. Its shares sank 9.6 percent to $324.01 a day after the online retailer reported an unexpectedly big loss for the second quarter. Visa's results also disappointed and its shares ended down 3.6 percent at $214.77.
"The earnings season overall has been in line but when companies with rich valuations disappoint, you're going to get crucified," said Lawrence Glazer, managing partner at Mayflower Advisors in Boston.
Signs emerged that tensions between the West and Russia are starting to hurt confidence in Germany, Europe's largest economy and the driver of its recovery. Germany's Ifo survey showed a hefty fall in business confidence over the last few weeks, prompting concerns Germany could be stuttering.
MSCI's All-World Index was down 0.4 percent, and European stocks ended 0.7 percent lower.
The Dow Jones industrial average fell 123.23 points or 0.72 percent, to 16,960.57. The S&P 500 lost 9.64 points or 0.48 percent, to 1,978.34, after closing at record highs for two straight days.
The Nasdaq Composite dropped 22.54 points or 0.5 percent, to 4,449.56.
Goldman Sachs (GS.N) downgraded its global allocation to equities to neutral on a short-term basis although the brokerage remained overweight stocks for the longer term.
Equity markets worldwide have rallied steadily through the year, with the MSCI All-World Index hitting a record high in early July. By region, Goldman is overweight in Europe and Japan and underweight in the United States.
The euro was last down 0.27 percent against the dollar at $1.3429 after falling to an eight-month low of $1.3421 on the weak German business data.
"U.S. data has been good or better than expected, whereas European data continues to point to a slowdown," said Boris Schlossberg, managing director in FX strategy at BK Asset Management in New York.
European officials are to continue talks over plans to squeeze Russia with further sanctions following the downing of a Malaysia Airlines plane that killed almost 300 people.
Dollar-traded Russian stocks fell 1.6 percent. Russian bonds also fell as the country's central bank unexpectedly raised interest rates.
U.S. Treasuries prices jumped, with 10-year Treasuries up 11/32 to yield 2.469 percent.
Gold edged up as speculators bought back bearish bets ahead of the weekend. U.S. COMEX gold futures for August delivery settled up $12.50 at $1,303.30 an ounce.
Brent oil prices climbed as deteriorating relations between Russia and the United States fanned concerns about supply disruptions. Brent crude rose $1.32 to settle at $108.39 a barrel while U.S. crude gained 2 cents to settle at $102.09.
(Additional reporting by Ryan Vlastelica and Sam Forgione in New York, Marc Jones in London and Lisa Twaronite in Tokyo; Editing by Nick Zieminski, Leslie Adler and James Dalgleish)