Wall Street stock prices slid on Wednesday, dragged down by economic reports portraying US factory growth as tepid and China in its worst manufacturing contraction since the global financial crisis.
The data aggravated investor anxieties that global economic growth might be sputtering, sapped a rally in European equities and gave Asian stock markets their worst day in months.
Prices of US Treasuries eased, while oil prices declined as much as 4 per cent after giving up early gains.
The economic reports, showing US manufacturing growth stayed at a two-year low in September and Chinese factory activity shrinking to a 6-1/2 year low, spurred a selloff in US material and industrial stocks.
The S&P materials index was down 2.1 per cent. The industrial sector fell 0.7 per cent.
The Dow Jones industrial average fell 50.58 points or 0.31 per cent to 16,279.89, the S&P 500 lost 3.98 points or 0.2 per cent to 1,938.76 and the Nasdaq Composite dropped 3.98 points or 0.08 per cent to 4,752.74.
Europe's FTSEuroFirst index of leading 300 European shares had rallied on regional manufacturing reports but ended flat with a rise of 0.07 per cent.
Shares in Volkswagen rose 5.2 per cent to 111.50 euros. It had lost about a third of its value in the previous two sessions after the German carmaker got caught up in a scandal that Deutsche Bank called an "investor's nightmare," which led to the resignation of CEO Martin Winterkorn on Wednesday.
The United States has accused Volkswagen of rigging its cars to conceal their emissions when the engines were tested.
Asian equity markets tumbled after the Chinese purchasing managers index intensified fears that a slowdown in the world's second-largest economy will spread more widely.
Asian stocks posted their biggest single-day fall since August 24, with MSCI's broadest index of Asia-Pacific shares outside Japan down 2.4 per cent.
Treasuries prices fell along with German Bunds. The benchmark 10-year Treasury last yielded 2.162 per cent, reflecting a decline in price of 10/32.
Yields on benchmark German bonds also rose as much as 3 basis points.
Positive reaction in Europe to regional PMIs helped the euro rise 0.60 per cent to $1.1180. The dollar was up 0.10 per cent against the yen at 120.25 yen.
Oil prices pivoted from early gains and were down as much as 4 per cent. Brent crude oil prices, which had been inching toward $50 per barrel, settled off $1.33, or 2.7 per cent, at $47.75 a barrel.
Platinum slid on fears about reduced demand from the auto sector, where it is used in diesel catalysts to clean up exhaust emissions. It fell to its lowest since January 2009 at $925.30 an ounce, before recouping some losses.
The metal has been hurt by news of Volkswagen's falsification of US vehicle emission tests as investors believed it could affect demand for diesel cars.