Wall Street, Europe slip after Chinese selloff

Copper and oil prices touch multi-year lows

A 6% tumble in Chinese shares on Tuesday and disappointing earnings from Walmart dented US equities while copper and oil prices touched multi-year lows.

Walmart Stores Inc fell 3.2% to $69.63 as the biggest drag on the Dow after the major retailer reported weaker-than-expected quarterly earnings and lowered its full-year forecast.

"There is no real good news that would allow this market to break out," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

"A name like Walmart today is part of what keeps the market kind of range bound, there are just too many companies with international businesses that are not really firing on all cylinders and then you throw in moves in China."

A broad measure of Asian stocks fell to its lowest in two years and Wall Street traded lower as the Chinese yuan weakened against the dollar, sparking renewed fears that Beijing may be intent on a deeper devaluation of the currency.

The Dow Jones industrial average fell 41.22 points, or 0.23%, to 17,503.96, the S&P 500 lost 6.16 points, or 0.29%, to 2,096.28 and the Nasdaq Composite dropped 26.84 points, or 0.53%, to 5,064.86.

Earlier, China's main Shanghai Composite and Shenzhen 300 indexes both lost more than 6% as investors bet demand in China will cool further.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.2% after hitting its lowest since July 2013. Japan's Nikkei dipped 0.3%.

MSCI's all-country world stock index lost 0.37%.

Britain's FTSE 100 closed down 0.4%. The pan-European FTSEurofirst index of 300 leading shares managed a gain of 0.2%, erasing earlier declines. Germany's lost 0.2% and France's CAC 40 fell 0.3%.

The worries over China came on a day when trade in the yuan was relatively calm after Beijing fixed the currency's exchange rate marginally higher for the third successive session.

China's central bank on Tuesday set the yuan's midpoint near Monday's closing price at 6.3966 per US dollar. In the spot market, the yuan closed flat at 6.3938 .

Concerns about slowing growth in China also hit commodities, as benchmark copper prices slid to a six-year low of $4,983 a tonne, to pierce the psychological $5,000 level, and were last down 1.8% at $5,022 a tonne.

Brent oil futures were down 0.1% to $48.67 per barrel, edging closer to a six-month intraday low of $48.24 touched last week.

However, US crude futures rebounded from a near 6-1/2-year low to trade up 1.5% to $42.49 on bullish US housing data and bets for an inventory decline, as well as short covering ahead of the front-month contract expiration on Thursday.

Investors will look to US inflation data and minutes of the latest Federal Reserve monetary policy meeting on Wednesday, as they look for clues when the Fed will begin raising interest rates.

Most investors are expecting a rate hike will occur by the end of year. Benchmark 10-year Treasury notes were last down 9/32 in price to yield 2.1819%.