By Chuck Mikolajczak
NEW YORK (Reuters) - Global equities were little changed on Thursday after their worst quarter in four years but commodities eased from earlier highs, as investors continued to question the depths of China's slowdown and the timing of an interest rate hike from the U.S. Federal Reserve.
The Purchasing Managers' Index data indicated China's manufacturing shrank again in September, suggesting the world's second-largest economy is still cooling more rapidly than expected a few months ago, but kept fears of a hard landing for the world's second-largest economy at bay.
Wall Street lost ground as economic data on the labor market and manufacturing gave mixed messages on the state of the U.S. economy, further clouding the picture on the timing of an interest rate hike from the U.S. Federal Reserve.
"The fact that what we really need to know is when the Fed is going to lift off and when China is going to bottom is going to be a big cause of volatility," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
"Those two main catalysts are in a vacuum right now, that information doesn't come until the middle of October."
Investors will look to Friday's key payrolls report in hopes for more clarity for when the Fed will begin raising rates.
The Dow Jones industrial average fell 114.21 points, or 0.7 percent, to 16,170.49, the S&P 500 lost 8.44 points, or 0.44 percent, to 1,911.59 and the Nasdaq Composite dropped 33.49 points, or 0.72 percent, to 4,586.68.
The FTSEuroFirst 300 index in Europe slipped 0.3 percent, while MSCI's all-country world index rose 0.03 percent.
Europe pared earlier gains and turned negative after weaker euro zone manufacturing growth, while telecoms and both Glencore and Volkswagen weighed.
Glencore shares were down 2.7 percent in London despite the company's assurances to investors that its debt-cutting plans remain on track and a decision by board member and legendary banker John Mack to buy $600,000 worth of stock.
The PMIs came a day after official data showed consumer prices fell again in September, adding to pressure on the European Central Bank to expand its stimulus program, already set at more than 1 trillion euros.
In currency markets, the dollar fell 0.3 percent to in the wake of the U.S. manufacturing data.
Commodities markets also retreated from earlier highs that stemmed from the brief lull in global risk aversion. The Thomson Reuters Jefferies CRB Index of 19 commodity prices was up 0.1 percent at 193.76 after reaching a high of 195.48.
U.S. crude was up 1 percent at $45.56 a barrel after a climb of nearly 4 percent boosted by a rally in U.S. gasoline on worries about potential damage to oil installations from a hurricane headed for the U.S. East Coast. Brent crude slipped 0.6 percent to $48.08 a barrel after climbing as high as $49.84.
Copper slipped as earlier optimism over the China data faded, but held near two-week highs, which analysts expected the metal to once again test.
Three-month copper on the London Metal Exchange lost 0.6 percent at $5,127 a tonne after hitting two-week highs of $5,230.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)
