Global equity markets fell sharply on Tuesday and oil slipped to near 27-month lows as investors shifted funds into safe-haven government debt as poor economic data from Europe heightened concerns about worldwide demand.
Wall Street's primary benchmark, the S&P 500 fell 1.5 percent to close at its lowest level in nearly two months. The small-cap Russell 2000 ended near a one-year low as investors reined in riskier bets ahead of this week's start of third-quarter earnings reports.
The primary catalyst for the equity market weakness was more bad news out of Germany, the euro zone's largest economy. After news on Monday of the biggest monthly drop in German industrial orders since the global financial crisis in 2009, data indicated the country's industrial output had plunged 4 percent in August, the biggest drop in more than five years.
US Stocks Down
U.S. markets fell throughout Wednesday’s session, ending near the day's lows. The 10-year U.S. Treasury note rallied, dropping its yield to 2.34 percent, the lowest since late August.
The Dow Jones industrial average fell 272.52 points, or 1.6 percent, to 16,719.39, the S&P 500 lost 29.72 points, or 1.51 percent, to 1,935.10 and the Nasdaq Composite dropped 69.60 points, or 1.56 percent, to 4,385.20.
The 30-year Treasury bond added more than a full point in price to hit its lowest yield since May 2013 and the yield on Germany's benchmark 10-year bond dropped to 0.903 percent.
MSCI's all-country world index of equity performance in 45 countries fell 0.97 percent, while the pan-European FTS Eurofirst 300 index ended down 1.5 percent.