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New York - US stocks finished sharply lower on Tuesday after the International Monetary Fund trimmed its global growth forecast while Germany posted a second straight day of disappointing economic data.
The Dow Jones Industrial Average tumbled 1.60% to 16 719.39.
The broad-based S&P 500 fell 1.51% to 1 935.10, while the tech-rich Nasdaq Composite Index sank 1.56% to 4 385.20.
The IMF cut its 2014 global growth forecast to 3.3%, down 0.1 percentage point from its July estimate and warned of stagnation in advanced economies.
The German economy ministry reported that industrial output in Europe's largest economy sank by 4.0% in August.
The report came a day after statistics office Destatis said that German factory orders had slumped 5.7% in August.
Other investor worries include signs of progress in the jihadist campaign in Syria, Federal Reserve plans to wind down stimulus, and Wednesday's unofficial start of the third-quarter earnings season in the wake of weakness in Europe.
"Some people are concerned about geopolitics," said Brent Schutte, market strategist at BMO Global Asset Management. "Some people are concerned about the Fed. Some people are concerned about Europe."
"And all those things are coming to the fore right now."
Amazon fell 1.6% as European Union officials said they were investigating whether the online retailer unfairly benefited from sweetheart tax deals in Luxembourg.
General Motors skidded 5.9% following a Morgan Stanley report titled "we're not waiting for GM to warn" that said the automaker's growth forecast was unrealistic.
Morgan Stanley said GM earnings would suffer from pressures in Russia and Latin America, as well as unfavourable foreign exchange effects.
Agco, which manufactures agricultural equipment, plummeted 10.6% after slashing its earnings forecast due to disappointing sales. Deere, another maker of farm equipment, lost 3.4%.
SodaStream, which manufacturers’ home appliances for making soda, sank 21.9% as it projected third-quarter revenues of just $125m, well below the $154.1m expected by analysts.
Bond prices rose sharply. The yield on the 10-year US Treasury slumped to 2.35% from 2.42% on Monday, while the 30-year declined to 3.06% from 3.13%. Bond prices and yields move inversely.
