Wall St. drops for third day, dollar cuts losses

By Michael Connor

NEW YORK (Reuters) - Disappointing results and other news from corporate bellwethers knocked down U.S. and European equity prices on Thursday, while strong American labour market data helped the dollar narrow losses.

Oil prices declined, with U.S. crude dropping below $49 per barrel for the first time since April, as gold got a lift from the softer dollar and briefly traded above $1,100 an ounce.

Wall Street was down for a third day, with the Dow Jones industrial average <.DJI> off 102.25 points, or 0.57 percent, to 17,748.79. The S&P 500 <.SPX> was down 10.24 points, or 0.48 percent, to 2,103.91, and the Nasdaq Composite <.IXIC> lost 15.85 points, or 0.31 percent, to 5,155.92.

 

Caterpillar shares fell as much as 3.8 percent to a four-year low of $76.85 after the world's largest construction and mining equipment maker reported sales declines in key markets in a sluggish global economy.

American Express fell 3.2 percent to $76.40 as revenue missed expectations, while 3M was down 3.4 percent at $150.09 after the diversified manufacturer cut its full-year forecast.

"Companies such as Caterpillar are a litmus test for the global economy, especially when the market is concerned about China's economy," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

European equities fell <.FTEU3> 0.5 percent after disappointing updates from companies including Aberdeen Asset Management and British energy supplier SSE .

In currency markets, the euro briefly traded above $1.10 for the first time in a week, as the Greek parliament signed off on reforms needed to start negotiations with lenders in a bid to avert bankruptcy.

The dollar index <.DXY> pared earlier losses on news that U.S. weekly jobless claims fell to their lowest level in more than four decades. It was last off 0.50 percent. The data made rate hikes by the Federal Reserve appear more likely.

The euro > was last up 0.6 percent against the dollar at $1.0997 and 0.5 percent against the yen at 136.12 yen >.

Worries over demand for commodities from markets such as China and the impact of an expected U.S. interest rate hike on emerging market capital flows have taken the shine off global markets.

Oil turned lower in volatile trading, after the dollar trimmed early losses and on concerns about shaky demand and ample global supply.

U.S. September crude was down 82 cents at $48.35 a barrel, having reached $49.63 before sliding to $48.28, the lowest front-month price since April. Brent September crude was down 89 cents at $55.24.

In metals, gold edged up from a five-year low, though bearish investors were still hovering. Gold > was last off 0.30 percent at $1,090.20 an ounce.

Copper and aluminium slid to new two-week lows as speculators resumed selling on persistent concern about growing global surpluses and weakness in China.

U.S. Treasury debt prices climbed. Benchmark 10-year Treasury notes > were up 10/32 in price to yield 2.2857 percent, from a yield of 2.325 percent late Wednesday. Yields on 30-year bonds dipped below 3 percent for the first time in two weeks.

(Reporting By Michael Connor in New York; Editing by Nick Zieminski and Bernadette Baum)