A gauge of stocks across the world edged lower on Wednesday following its largest daily run-up in over two years, as the outlook on earnings soured after a warning on the European auto sector and a revenue miss from IBM.
Crude futures fell for the first session in four after US government data showed a much larger-than-expected build in crude inventories.
The US dollar rose as the market awaited the minutes from the latest Federal Reserve meeting. Lower-than-expected UK inflation data weighed on sterling, which gave up the previous day's gains.
On Wall Street, IBM fell 7.4 per cent, dragging blue-chips lower a day after the company missed revenue expectations. On Tuesday, the S&P 500 posted the biggest daily gain since late March.
Stocks extended losses when oil prices fell further.
The Dow Jones Industrial Average fell 266.91 points, or 1.03 per cent, to 25,531.51, the S&P 500 lost 25.22 points, or 0.90 per cent, to 2,784.7 and the Nasdaq Composite dropped 76.18 points, or one per cent, to 7,569.31.
European stocks hit a one-week high in early trade, but then were pulled lower by a 2.5 per cent fall in an index of auto stocks. Goldman Sachs said slow demand in China could hit earnings in the sector. The pan-European FTSEurofirst 300 index lost 0.71 per cent and MSCI's gauge of stocks across the globe gained 1.71 per cent.
Emerging market stocks rose 1.34 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.64 per cent higher, while Japan’s Nikkei rose 1.29 per cent.
Oil traders took profits after a three-day run-up in prices, with losses extending after data showed US crude inventories rose more than expected.
US crude fell 2.74 per cent to $69.95 per barrel and Brent was last at $79.55, down 2.28 per cent on the day.
The euro fell 0.38 per cent to $1.1529 and Sterling was last trading at $1.3134, down 0.38 per cent on the day.
The Japanese yen strengthened 0.15 per cent versus the greenback at 112.09 per dollar. The dollar index rose 0.34 per cent.
The Brazilian real rose against the dollar after data showed economic activity rose more than expected in August.
US Treasury yields continued to trade range-bound after a massive run-up last week.
Benchmark 10-year notes last rose 1/32 in price to yield 3.1539 per cent, up from 3.156 per cent.
The 30-year bond last rose 2/32 in price to yield 3.3278 per cent, from 3.33 per cent late on Tuesday.