Global equities slide catches Wall Street as euro, bonds rise

By Michael Connor

NEW YORK (Reuters) - Stocks around the world fell for a fifth day on Thursday, sliding towards two-year lows, as worries lingered over global economic growth and the scandal over Volkswagen's emissions test-cheating rattled Europe's carmakers.

Government bond prices rose on safety bids, while the U.S. dollar fell against the euro and jumped to a 13-year high against the Norwegian crown after a surprise cut in the oil producer's interest rates.

Wall Street equity indexes fell in trading clouded by concerns about global growth and ahead of a speech by Federal Reserve Chair Janet Yellen that comes a week after the U.S. central bank shook markets by keeping in place near-zero interest rates.

 

Intraday losses easily topped 1 percent before recovering some in late trading. Wall Street's Dow Jones industrial average <.DJI> ended down 78.57 points, or 0.48 percent, to 16,201.32, the S&P 500 <.SPX> was off 6.52 points, or 0.34 percent, to 1,932.24 and the Nasdaq Composite <.IXIC> lost 18.27 points, or 0.38 percent, to 4,734.48.

Shares of Caterpillar fell as much as 8 percent to a five-year low of $64.65 and closed down 6.3 at $65.80. The company slashed its revenue forecast for 2015 by $1 billion and said it could cut up to 10,000 jobs through 2018 amid a downturn in mining and energy industries.

Tokyo's Nikkei <.N225> closed down 2.8 percent as Japan returned from an extended break, setting a gloomy tone in Asia and Europe's bourses <.FTEU3>.

EMISSIONS TEST SCANDAL

Shares of Volkswagen , which had been battered on news it cheated on diesel emissions tests, clawed back 0.6 percent after some reassuring German and French sentiment data. [.EU]

However, the scandal threatened to widen to VW's rivals, and share prices of BMW , Renault , Fiat and Daimler all ended lower. [.EU]

Those declines dragged London's FTSE <.FTSE> down 1.2 percent and Frankfurt's DAX <.GDAXI> and the Paris CAC 40 <.FCHI> indices by nearly 2 percent.

MSCI's 45-country All World index <.MIWD00000PUS> was off 0.6 percent, putting up a fifth day of losses.

Prices for U.S. Treasuries and German Bunds were driven up by investor concerns over possibly slowing global economic growth and the stocks selloff.

Benchmark 10-year Treasuries notes > rose 5/32 in price for a yield of 2.125 percent, down nearly 2 basis points from late on Wednesday. The 10-year yield touched its lowest in four weeks at 2.081 percent. [GVD/EUR] [US/]

Norway's crown > slumped 2 percent after its central bank unexpectedly cut interest rates.

The euro > added to gains it had made on Wednesday, when European Central Bank chief Mario Draghi appeared to suggest a fresh round of money printing wasn't as close as many analysts had thought.

The euro was last up 0.40 percent at $1.1228.

Oil prices were under pressure from the equities slump but seesawed in late trading and ended up. U.S. crude settled up 43 cents, or almost 1 percent, at $44.91 a barrel.

Emerging market currencies remained under heavy fire too.

The Brazilian real > at one point sank to a new all-time low of 4.2482 per dollar, clobbered by a recession, fiscal deficit and political instability following corruption allegations against leading politicians in the world's seventh-largest economy. [EMRG/FRX]

(Editing by Nick Zieminski and James Dalgleish)