Traders dumped retail US stocks Friday, with giant Walmart losing 3.0 percent, after a weak report on American consumer spending added to worries about the strength of the economy.
Coming on the heels of Thursday's disappointing US GDP report, the concerns about the world's largest economy trumped unexpectedly strong eurozone growth data and the tenacious hold of oil prices above $45 a barrel.
Wall Street's losses -- the Dow fell 0.3 percent and the Nasdaq dropped 0.6 percent -- capped a day in which nearly all leading markets tumbled.
While the Tokyo market was closed, Hong Kong shares sank 1.5 percent, Frankfurt fell 2.7 percent, and London 1.3 percent.
The report that US growth slowed sharply to just 0.5 percent in the first quarter of the year, combined with the Japanese central bank's shock decision to not deploy more stimulus, left investors from Asia to Europe and the Americas in a sour mood.
Adding to that, US consumer spending grew a bare 0.1 percent in March over February, a disappointing picture especially given the strength of job creation and income growth.
Some analysts called the consumer spending downturn a lull and predicted a rebound in the coming months.
But Jay Morelock of FTN Financial said that if US corporate earnings also continue to fall as they have in the first quarter, that could slow hiring and the expansion of household incomes.
"We are keeping an eye on corporate profits as the biggest risk to this forecast," Morelock said.
The largest retail chain shares, like Target, Costco and Macy's, all lost more than 2.0 percent as investors fled the sector.
- Doubts over eurozone growth -The doubts over the strength of growth extended to Europe. Data Friday showed that the eurozone economy expanded by a faster-than-expected 0.6 percent in the first quarter. But negative inflation of 0.2 percent in April took the shine off those figures.
"It is unlikely that the eurozone will be able to sustain this growth rate in the second quarter," said IHS Global Insight chief European economist Howard Archer
As for inflation, he added, "It will clearly be a very long, hard slog to get eurozone consumer price inflation back up to the ECB's target rate" of around 2 percent.
Contrarily, foreign exchange traders bought into the eurozone growth story, pushing the euro up to $1.1452.
"Not only is the US data not very good, but data elsewhere is pretty good: The eurozone GDP is growing faster than the US at this point," said Greg Anderson at BMO Capital Markets.
Propelled by the Bank of Japan's inaction on stimulus, the yen hit an 18-month high on the dollar at 106.31.
- Bright spots online -
There were some bright spots in US corporate earnings. Shares of online retail giant Amazon jumped 9.5 percent after it handily beat forecasts in racking up a fourth consecutive profitable quarter.
Shares of travel giant Expedia and LinkedIn, the professional online network, also surged after they beat forecasts.
Among large European movers was Sanofi, whose shares slumped 5.4 percent after US biotech company Medivation rejected its unsolicited $9.3 billion offer.
Sanofi vowed it would pursue a hostile bid for the manufacturer of the blockbuster prostate cancer medication Xtandi.
- Key figures at 2100 GMT -
New York - Dow: DOWN 0.3 percent at 17,773.64 (close)
New York - S&P 500: DOWN 0.5 percent at 2,065.30 (close)
New York - Nasdaq: DOWN 0.6 percent at 4,775.36 (close)
London - FTSE 100: DOWN 1.3 percent to 6,241.89 (close)
Frankfurt - DAX 30: DOWN 2.7 percent at 10,038.97 (close)
Paris - CAC 40: DOWN 2.8 percent at 4,428.96 (close)
EURO STOXX 50: DOWN 2.8 percent at 3,037.93
Hong Kong - Hang Seng: DOWN 1.5 percent at 21067.05 (close)
Shanghai - Composite: DOWN 0.3 percent at 2,938.32 (close)
Tokyo - Nikkei 225: Closed for a public holiday
Euro/dollar: UP at $1.1452 from $1.1354 Thursday
Dollar/yen: DOWN at 106.31 yen from 108.11 yen