Wall Street joins global stocks slide; 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 dollar fell against the euro but jumped to a 13-year high against the Norwegian crown after a surprising 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 later Thursday 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.

 

The Dow Jones industrial average <.DJI> fell 104.46 points, or 0.64 percent, to 16,175.43, the S&P 500 <.SPX> lost 10.54 points, or 0.54 percent, to 1,928.22 and the Nasdaq Composite <.IXIC> dropped 34.36 points, or 0.72 percent, to 4,718.38.

Shares of Caterpillar fell as much as 8 percent to a five-year low of $64.65. 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, to leave MSCI's 45-country All World index <.MIWD00000PUS> off 0.9 percent and with 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 14/32 in price for a yield of 2.098 percent, down nearly 5 basis points from late on Wednesday. The 10-year yield touched its lowest level 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 0.50 percent at $1.124.

Oil prices were under pressure from the equities slump but seesawed were last up slightly.

Platinum > which has been hammered by the VW scandal because it used in catalytic converters to clean exhaust emissions, also rebounded having hit its lowest level in more than 6-1/2 years.

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 Bernadette Baum and Nick Zieminski)