LONDON (AP) — Global growth concerns and disappointing U.S. corporate earnings weighed heavily on stock markets Wednesday.
Economic indicators have been poor in recent weeks, particularly in Europe. This week, Germany reported a drop in investor confidence, France said its deficits would be higher than expected, and unemployment rose in Britain.
The International Monetary Fund, meanwhile, lowered its outlook for the world economy, predicting that government spending cuts will slow U.S. growth and keep the euro currency countries in recession this year.
Meanwhile, a string of bad news from big companies like Apple and Bank of America encouraged traders to sell.
Germany's DAX fell 2.3 percent to close at 7,503.03 while France's CAC-40 lost 2.4 percent to 3,599.23. The euro was down 1 percent against the dollar to $1.3049.
In Britain, the FTSE 100 ended 1 percent lower at 6,244.21 after Tesco, the country's largest supermarket operator, reported a sharp drop in profits. The company blamed costs at its Fresh & Easy U.S. operations, which it is trying to sell. It also sounded negative about Asian markets, announcing it would pull out of Japan and take a more measured approach to growth in China. Its shares fell 3.9 percent.
Labor market figures for the U.K. were also negative, showing unemployment rose by 70,000 in the three months to February. The figure suggests the British economy is unlikely to stage a significant recovery in coming months.
Wall Street opened lower and continued falling after Bank of America reported disappointing earnings, causing its shares to drop 3.8 percent. The Dow was down 1.2 percent to 14,580.76 while the broader S&P 500 shed 1.8 percent to 1,546.21.
Apple Inc. stock slumped 5.9 percent, dragging tech companies lower, after a key supplier warned that inventories were moving slowly. Elsewhere, a fall in commodity and energy prices contributed to the losses, causing a sharp drop in the share price of big oil companies and miners.
Corporate earnings reports had until Wednesday been one of the few bright spots for markets this week, so investors will hope for improvements in reports from other big names — such as American Express and eBay — later in the day.
Another point of focus will be the Federal Reserve's Beige Book, a regular report that is expected to show that activity in the world's largest economy is still only gradual.
Earlier, Asian stock markets mostly closed higher.
Japan's Nikkei 225 rose 1.2 percent to 13,382.89 as the yen weakened again, helping its many exporting companies. The dollar was up 0.4 percent to 97.91 yen.
Hong Kong's Hang Seng fell 0.5 percent to 21,569.67. Australia's S&P/ASX 200 advanced 1.1 percent to 5,004.60. Benchmarks in Indonesia, Malaysia and the Philippines also rose. South Korea's Kospi rose less than 0.1 percent to 1,923.84.
Benchmark oil for May delivery was down 32 cents at $88.39 per barrel in electronic trading on the New York Mercantile Exchange.
Pamela Sampson in Bangkok contributed to this report.