Wall Street struggled back from steep falls after stocks took a pounding Wednesday.
Government debt prices rose after fresh data from the United States and China stoked fears of a global slowdown, Reuters reported Thursday.
Ebola added to a climate of fear, with Texas officials reporting that another healthcare worker in Dallas tested positive for the deadly virus. Almost 4,500 people have died of the disease, mostly in West Africa.
The S&P 500 fell as much as 3 percent, briefly turning negative for the year, while European equities finished 3.2 percent lower and marked their biggest one-day slide in almost four years.
Popular trades that have worked for most of the year, including heavy bets on the dollar, more gains in stocks, and on an eventual rise in yields, are unraveling.
A fall in China’s inflation rate to a five-year low and a decline in US producer prices for the first time in over a year signaled to investors to reassess their views on when the US Federal Reserve might raise interest rates.
“There’s concern about an absence of aggregate demand in the world, and that’s really what’s weakening the market. The big fear out right now is we’re not immune from that,” said David Joy, chief market strategist at Ameriprise Financial in Boston.
An MSCI gauge of stocks in major markets was down 1 percent. The CBOE Volatility Index closed at 26.25, up 15.2 percent, after earlier hitting 31.06, the highest level since November 2011.
The Dow Jones industrial average fell 173.45 points, or 1.06 percent, to 16,141.74, the S&P 500 lost 15.21 points, or 0.81 percent, to 1,862.49, and the Nasdaq Composite 11.85 points, or 0.28 percent, to 4,215.32.
It was also the heaviest trading day for on-the-run 10-year Treasury note contracts since May 2008.
A massive rally in US Treasuries pushed the benchmark 10-year note’s yield as low as 1.865 percent, its lowest level since May 2013.
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