By Herbert Lash
NEW YORK (Reuters) - World equity markets and commodities fell on Wednesday as global growth concerns continued to take a heavy toll on investor sentiment and disappointing earnings reports weighed on Wall Street stocks.
Copper, which is considered a barometer for manufacturing growth, fell almost 3 percent, weighed by worries about the global economy and a 10.3 percent decline in March European car sales, a key source of metals demand. Defying earlier industry predictions of a second-half rebound, auto sales are headed for a sixth straight annual decline to a two-decade low.
U.S. and European shares fell more than 1 percent after the report on European car sales added to fears about the region's economy and after the International Monetary Fund on Tuesday downgraded its global growth projections for this year and next.
"The macro outlook remains bleak and equities markets are still not pricing it in yet," Jerome Troin-Lajous, a trader with Louis Capital Markets, said. "It's time to get protection, continue to get out of cyclical and industrial stocks, and turn overweight 'flight-to-safety' trades."
But gold rose, bucking the fall in other commodities, after a slide to two-year lows this week lured Asian buyers. Sentiment was still severely shaken by the biggest two-day loss in 30 years.
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Brent crude fell below $99 per barrel on the prospect of sluggish U.S. and Chinese fuel demand that will be squeezed at the same time by rising crude supplies in the United States.
The North Sea benchmark has lost nearly 6 percent over the past five sessions in a commodities rout triggered by data showing growth in China, the world's second-largest oil consumer, slowed unexpectedly in this year's first three months.
"At the moment the oil complex is in a technical downtrend with the fundamentals being driven by a deteriorating demand projection in a robust supply environment," said Dominick Chirichella of Energy Management Institute.
The benchmark S&P 500 index retreated from its second-best daily performance of the year on several disappointing earnings reports and the drop in commodities.
The Dow Jones industrial average was down 136.17 points, or 0.92 percent, at 14,620.61. The Standard & Poor's 500 Index was down 22.72 points, or 1.44 percent, at 1,551.85. The Nasdaq Composite Index was down 59.11 points, or 1.81 percent, at 3,205.52.
Shares of Apple fell more than 5 percent to a 16-month low after Cirrus Logic , a chip maker and key supplier, gave a disappointing revenue forecast for the current quarter, reviving concerns about weakening demand for iPhone and iPads.
Shares of Intel Corp , the world's largest semiconductor maker, fell more than 1 percent after it said its current-quarter revenue would decline as much as 8 percent and it trimmed its 2013 capital spending plans.
First-quarter revenue at Yahoo Inc fell shy of expectations on declining Web traffic and falling advertising sales. Bank of America Corp , the last of the four big U.S. banks to report first-quarter results, said revenue fell.
MSCI's all-country world equity index, which tracks shares in 45 countries, dipped 1.2 percent to 355.44 points, reversing some of Tuesday's sharp gains.
European shares fell to their lowest level in around four months. The broad FTSEurofirst 300 index extended a three-day losing streak, falling 1.5 percent to close down at a provisional 1,147.92.
The euro zone's blue-chip Euro STOXX 50 index also retreated, falling 2.1 percent to 2,555.18 points.
Brent crude shed $1.54 to $98.37, while U.S. crude slipped $1.47 to $87.25.
Bonds resumed their gains as world shares and industrial commodities responded to concern about economic growth.
"Whether against stocks or commodities, the demand for Treasuries remains firm," said Ian Lyngen, a senior government bond strategist at CRT Capital Group in Stamford, Connecticut.
The benchmark 10-year U.S. Treasury note was up 8/32 in price to yield 1.695 percent.
The yen fell for a second straight day against the dollar and the euro on expectations that the Group of 20 major developed and emerging economies meeting in Washington will not voice strong concern over Japan's aggressive monetary easing, which has triggered a sharp slide in the yen.
The dollar rose 0.37 percent to 97.88 yen, although it remained below the four-year high of 99.94 yen set on Reuters data last week.
The euro slid from a seven-week high against the dollar, tracking losses in European shares. The euro slipped 0.87 percent to $1.3061.
Spot gold prices rose $21.52 to $1,389.30 an ounce.
(Reporting by Herbert Lash; Additional reporting by Richard Hubbard in London; Editing by Leslie Adler)