NEW YORK (Reuters) - Global stocks and crude oil fell on Tuesday after an unexpected drop in U.S. consumer confidence in July and poor corporate results helped douse a recent rally in worldwide equity and commodity markets.
The slide in consumer sentiment enhanced the appeal of government debt and the U.S. dollar, which rebounded from its lowest level this year versus a basket of currencies.
Oil fell more than 2 percent to below $67 a barrel while copper prices, which reflect demand in the construction industry, also slipped.
The yen rallied across the board as equity markets slid and investors dumped riskier assets.
The slide in equity markets snuffed an 11-day winning streak of Britain’s top share index, while Japan’s Nikkei share average ended nine straight sessions of gains, its longest winning run since 1988.
U.S. consumer confidence recorded its second consecutive decline as sentiment remained hampered by a difficult job market, Conference Board data showed.
“The (U.S.) consumer confidence number was a big shocker, not necessarily the headline but definitely the sub-component for the labor market,” said Kenneth Broux, financial market economist at Lloyds Banking Group in London.
The Conference Board, an industry group, said its index of consumer attitudes slid to 46.6 in July from 49.3 in June. Economists had expected a reading of 49.0, based on the median of 64 forecasts in a Reuters poll.
Disappointing quarterly results from companies like Office Depot Inc ODP.N, the No. 2 U.S. office supply retailer, damped hopes for a strong economic recovery.
“Consumers are feeling no love in this recovery,” said Boris Schlossberg, director of currency research at GFT Forex in New York. “All this suggests is that the critical assumption by the recovery bulls that consumption will come back as the recovery takes hold is faulty.”
Shortly after 1 p.m. EST (1700 GMT) the Dow Jones industrial average .DJI was down 73.99 points, or 0.81 percent, at 9,034.52. The Standard & Poor's 500 Index .SPX was down 10.03 points, or 1.02 percent, at 972.15. The Nasdaq Composite Index .IXIC was down 12.43 points, or 0.63 percent, at 1,955.46.
Banks were among the worst hit, with Deutsche Bank falling more than 11 percent.
The pan-European FTSEurofirst 300 .FTEU3 index ended down 1 percent at 902.85.
The FTSE 100 .FTSE fell 57.29 points at 4,528.84, in a choppy session that saw it struggling to obtain a record 12th day of gains. The index has risen 11 percent in two weeks.
Crude oil slide. U.S. light sweet crude oil fell $1.59 to $66.79 a barrel.
“The petroleum markets are backing off from the highs, seemingly prepared, along with the S&P 500, to at least take a break from the recent rally,” said Tim Evans, an analyst at Citi Futures Perspective in New York.
Prices for U.S. and euro zone government debt rose as the fall in equities tempted investors back into bonds, but Treasuries pared gains after the results of a $42 billion auction of two-year notes was announced.
The benchmark 10-year U.S. Treasury note was up 18/32 in price to yield 3.65 percent. The 2-year U.S. Treasury note was down 2/32 in price to yield 1.08 percent.
The dollar was up against a basket of major currencies, with the U.S. Dollar Index .DXY up 0.40 percent at 78.943.
The euro was down 0.61 percent at $1.4157, while against the yen, the dollar was down 1.05 percent at 94.18.
Spot gold prices fell $14.25 to $938.40 an ounce.
Japan's Nikkei share average .N225 edged down 1.4 points to 10,087.26, while the MSCI index of Asia Pacific stocks outside Japan .MIAPJ0000PUS rose 1.5 percent to a 10-month high.
Reporting by Rachel Chang, Wanfeng Zhou and Chris Reese in New York and Jamie McGeever, Dominic Lau and Rebekah Curtis in London; Writing by Herbert Lash; Editing by James Dalgleish