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Dow falls over 250 points on global growth concerns

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US stocks have slid sharply, with the Dow Jones Industrial Average sinking two per cent, as disappointing economic data from China and Europe followed the Federal Reserve’s slashing its growth forecast for the United States.

Tech stocks fell broadly, with Microsoft’s 2.6 per cent loss helping pull the Nasdaq 2.4 per cent lower. Growth-related plays like mining stocks and oil took the biggest falls, with Alcoa sinking 4.3 per cent, Occidental Petroleum 6.1 per cent and Chevron 3.5 per cent.

At the close the Dow Jones Industrial Average was down 250.82 points, or 1.96 per cent, at 12,573.57.

The S&P 500-stock index fell 30.18 (2.23 per cent) to 1,325.51, while the tech-rich Nasdaq dropped 71.36 (2.44 per cent) to 2,859.09.

The fall came in the wake of disappointing purchasing manager index reports from China and Europe, both signalling a downturn in industrial activity.

Meanwhile, on Wednesday, the Federal Reserve slashed its growth forecast for the US economy, and disappointed investors by announcing a renewal of the relatively low-impact Operation Twist stimulus and not opting for a new and bigger quantitative easing program.

“Weak economic data and the reluctance by the Fed to do anything meaningfully proactive is causing investors to try to take some of the profits seen since the June 1st low,” said Sam Stovall a strategist at Standard & Poor’s.

Big oil fell with the 3.7 per cent-plus fall in crude oil prices in New York and London.

The US West Texas Intermediate benchmark sank $US3.25 from Wednesday’s price to $US78.20 a barrel, the lowest level since the beginning of October; London’s Brent contract fell $US3.46 to $US89.23 a barrel, its first trip below the $US90 line since December 2010.

Shares of ExxonMobil lost 3.4 per cent, Marathon Oil 5.6 per cent, Suncor Energy 7.4 per cent, and US traded shares of BP 5.2 per cent.

On the Nasdaq, Onyx Pharmaceuticals was a breakout gainer, adding 43.1 per cent, after a panel of the US Food and Drug Administration approved its myeloma drug Kyprolis for certain treatments. The FDA still needs to give the drug a final approval.

US bond prices picked up. The yield on 10-year treasuries fell 0.02 percentage points to 1.62 per cent, and those on 30 year paper fell 0.04 to 2.69 per cent.

Bond yields go down as prices go up.