NEW YORK (Reuters) - Stock markets worldwide fell on Tuesday after weak Chinese and British factory data rekindled fears of slowing global growth, sending benchmark Treasury yields to nearly two-week lows.
Activity at China’s factories shrank for the 14th straight month in April as demand stagnated, a private survey showed. The data contributed to a drop in oil prices on worries over demand, given the country’s status as a major oil importer.
Britain’s manufacturing output last month also unexpectedly shrank to hit its lowest level in three years.
U.S. shares gave back Monday’s gains. The drop in oil prices helped push the S&P 500 energy index .SPNY down 2.24 percent, making it the leading decliner among the 10 major S&P sectors.
“There are some concerns about the China impacts on the global economy,” said Macrae Sykes, analyst at Gabelli & Co Inc in Rye, New York. He also said the drop in commodity prices removed support from U.S. equities.
European shares fell to three-week lows, with Germany’s Commerzbank (CBKG.DE) leading the decline after a slump in profits, while the weak Chinese factory data pushed down mining companies. European banking shares .SX7P ended down 3.68 percent.
Worries about the health of the global economy helped push yields lower and boosted prices on safe-haven U.S. government debt. A surprise interest rate cut in Australia also raised concerns about central banks’ ability to boost sluggish growth, which in turn contributed to lower U.S. yields.
MSCI’s all-country world equity index .MIWD00000PUS, was last down 4.65 points, or 1.15 percent, at 399.52.
The Dow Jones industrial average .DJI closed down 140.25 points, or 0.78 percent, at 17,750.91. The S&P 500 .SPX ended down 18.06 points, or 0.87 percent, at 2,063.37. The Nasdaq Composite .IXIC closed down 54.37 points, or 1.13 percent, at 4,763.22.[nL2N1801Q7]
Europe's broad FTSEurofirst 300 index .FTEU3 ended down 1.74 percent at 1,318.91.
Yields on U.S. Treasuries maturing between five and 30 years hit their lowest levels since April 20, with benchmark 10-year yields US10YT=RR hitting a session low of 1.782 percent. Two- and three-year yields hit their lowest levels in more than two weeks, at 0.742 percent and 0.888 percent, respectively. [nL2N1801MF]
“I think people are realizing monetary policy is at its maximum point... and growth doesn’t look like it’s accelerating,” said Priya Misra, head of global rates strategy at TD Securities in New York.
In addition to concerns over demand, rising oil output contributed to declines in prices. Output from the biggest oil producers in the Middle East jumped last month or could surge in the near term, data showed this week.
U.S. crude CLc1 settled down 2.52 percent at $43.65 a barrel, while Brent crude LCOc1 settled down 1.88 percent at $44.97 a barrel.[nL5N1804M7]
The dollar hit an 18-month low of 105.55 yen JPY= on doubts the Bank of Japan would intervene to stem the yen's dramatic rise, which has undermined attempts to reflate the developed world's third-biggest economy. [nL2N1801DF]
U.S. gold futures for June delivery GCv1 settled down 0.3 percent at $1,295.80 an ounce.
Additional reporting by Dion Rabouin in New York; Editing by Nick Zieminski and Dan Grebler