By Michael Connor
NEW YORK (Reuters) - Wall Street stock prices fell on Wednesday, dragged down by economic reports portraying U.S. factories 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 U.S. Treasuries and other safe-haven government debt eased.
The reports, showing U.S. 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 U.S material and industrial stocks.
The S&P materials index <.SPLRCM> was down 1.7 percent. The industrial sector <.SPLRCI> was lower by 0.9 percent.
The Dow Jones industrial average (DJI) fell 68.72 points, or 0.42 percent, to 16,261.75 in choppy Wall Street trading, the S&P 500 (SPX) declined 3.9 points, or 0.2 percent, to 1,938.84 and the Nasdaq Composite (IXIC) added 1.10 points, or 0.02 percent, to 4,757.82.
Europe's FTSEuroFirst index of leading 300 European shares (FTEU3) had rallied on regional manufacturing reports but ended flat with a rise of 0.07 percent.
Shares in Volkswagen (DE:VOWG_p) rose 5.19 percent. 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 (XETRA:DBKGn) called an "investor's nightmare," which led to the resignation of CEO Martin Winterkorn.
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 a slowdown in the world's second-largest economy will spread more widely.
Asian stocks posted their biggest single-day fall since Aug. 24, with MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) down 2.4 percent.
The MSCI world index was flat (MIWD00000PUS).
Treasuries prices fell along with German Bunds. The benchmark 10-year Treasury (US10YT=RR) last yielded 2.1479 percent, reflecting a decline in price of 6/32.
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 percent to $1.1180
Oil prices pivoted from early gains and were down as much as 3 percent. Brent crude oil prices, which had been inching toward $50 per barrel, were last off 2 percent at just over $48. (LCOc1)
Platinum
The metal has been hurt by news of Volkswagen's falsification of U.S. vehicle emission tests as investors believed it could affect demand for diesel cars.