By Lewis Krauskopf
NEW YORK (Reuters) - Sterling tumbled on Thursday and a gauge of global stocks declined for a sixth straight session as political developments in Britain rippled through currency, bond and equity markets.
Wall Street's main stock indexes opened lower after mixed corporate earnings. Oil prices rose as they continued to recoup some losses form a recent steep plunge.
In Britain, Prime Minister Theresa May battled to save a draft divorce deal with the European Union after her Brexit secretary and other ministers quit in protest and lawmakers stepped up efforts to topple her.
Sterling was last trading at $1.2765, down 1.76 percent on the day, and also fell steeply against the euro.
The pan-European STOXX 600 index lost 1.62 percent, while Britain's FTSE 250 dropped 2.0 percent.
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"Risk appetite has taken a hit across the board, as this breakdown comes just as Italy ramps up its standoff with Brussels, and investors continue to fret that the great boom in tech earnings has come to an end," said Chris Beauchamp, chief market analyst at IG.
On Wall Street, the Dow Jones Industrial Average fell 257.38 points, or 1.03 percent, to 24,823.12, the S&P 500 lost 25.3 points, or 0.94 percent, to 2,676.28 and the Nasdaq Composite dropped 44.31 points, or 0.62 percent, to 7,092.08.
Shares in Walmart Inc fell 1.8 percent after the retailer's earnings report.
MSCI's gauge of stocks across the globe shed 0.60 percent, falling for a sixth straight session.
The dollar index, which measures the greenback against a basket of currencies, rose 0.33 percent, with the euro up 0.04 percent to $1.1312.
U.S. retail sales rebounded sharply in October as purchases of motor vehicles and building materials surged, likely driven by recovery efforts in areas devastated by Hurricane Florence.
U.S. Treasury prices rose, sending yields to two-week lows across the curve, as concerns about a weak stock market and Britain's exit from the European Union prompted investors to seek the safety of government bonds.
Benchmark U.S. 10-year notes last rose 10/32 in price to yield 3.0848 percent, from 3.12 percent late on Wednesday.
Nerves among Britain government bond investors forced the country's debt agency to accept low-ball bids for a 20-year bond at auction.
Oil rose, steadying after steep recent declines, though concern about the prospect of an oversupplied market next year continued to weigh on prices despite OPEC's message that it may cut crude output.
U.S. crude rose 1.1 percent to $56.87 per barrel and Brent was last at $67.04, up 1.39 percent on the day.
(Additional reporting by Josephine Mason, Helen Reid and Marc Jones in London; Editing by Angus MacSwan and Nick Zieminski)