US, European stocks fall as global growth fears weigh

European and US stocks fell sharply Tuesday as weak Chinese manufacturing data and a downgrade in the eurozone growth forecast revived worries about slowing global growth.

Chinese factory activity fell further into contraction territory in April, according to the private Caixin survey of purchasing managers.

That suggests the world's second-largest economy "lacks a solid foundation for recovery and is still in the process of bottoming out," said He Fan, chief economist at Caixin Insight Group.

The European Union, meanwhile, cut its eurozone growth forecasts for this year, warning that global risks including the slowdown in China and the danger of Britain leaving the bloc were harming economic recovery.

Most bourses were a sea of red.

In New York, the broad-based S&P 500 closed down 0.9 percent.

London's FTSE 100 index shed 0.9 percent, while in Paris the CAC 40 retreated 1.6 percent and in Frankfurt the DAX 30 tumbled 1.9 percent, falling below the 10,000 points level.

A notable exception was the Shanghai stock index, which climbed 1.9 percent on speculation the Chinese government would enact new stimulus efforts.

US auto sales bounced back in April, rising 3.6 percent from the year-ago period and lifting the seasonally adjusted annual rate to 17.42 million in April compared with 16.75 million units a year ago, according to Autodata Corporation.

But stocks were buffeted by oil prices, which retreated further from their 2016 peaks on worries about excess supply.

Adding to the woes: much-lower earnings from Swiss banking giant UBS and Germany's Commerzbank, both of which pointed to the drag from lower interest rates on profits.

Commerzbank's stock dove 9.6 percent and UBS tumbled 7.5 percent.

"Concerns about global growth are at the forefront of the investors' thinking right now," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

The euro climbed to an eight-month high against the dollar before retreating a bit as expectations dim for the Federal Reserve to soon lift interest rates in light of mediocre US economic data.

Attention is already turning to the release of US jobs data on Friday. Many expect a slowdown in hiring, which would further dim the prospects of the Fed hiking interest rates.

- Key figures around 2100 GMT -

New York - Dow: DOWN 0.8 percent at 17,750.91 (close)

New York - S&P 500: DOWN 0.9 percent at 2,063.37 (close)

New York - Nasdaq: DOWN 1.1 percent at 4,763.22 (close)

London - FTSE 100: DOWN 0.9 percent at 6,185.59 (close)

Frankfurt - DAX 30: DOWN 1.9 percent at 9,926.77 (close)

Paris - CAC 40: DOWN 1.6 percent at 4,371.98 (close)

EURO STOXX 50: DOWN 1.9 percent at 2,974.20 (close)

Hong Kong - DOWN 1.9 percent at 20,676.94 (close)

Shanghai - UP 1.9 percent at 2,992.64 (close)

Tokyo - Nikkei 225: Closed for public holiday

Euro/dollar: DOWN at $1.1507 from $1.1535 Monday

Dollar/yen: UP at 106.63 yen from 106.42 yen