The Dow industrials fell to a four-week low after remarks by European leaders escalated investors' fears about the euro zone, while a measure of economic sentiment in the region slid to a level not seen in more than two years.

The Dow Jones Industrial Average dropped 106.77 points, or 0.8%, to 13000.71, the lowest level since Aug. 2. The Standard & Poor's 500-stock index gave up 11.01 points, or 0.8%, to 1399.48. Technology and energy shares led declines across all of the index's 10 sectors.

The Nasdaq Composite Index lost 32.48 points, or 1.1%, to 3048.71. The European Commission's euro-zone economic sentiment indicator fell to the lowest level since late 2009.

The consumer confidence component worsened. Traders turned sour on reports that Spain will delay a decision on whether to seek a sovereign bailout until aid conditions are clear.

Meanwhile, Slovakia's prime minister said he saw a 50% chance the euro zone will break up. Investors awaited Federal Reserve Bank Chairman Ben Bernanke's speech at the annual economic symposium in Jackson Hole, Wyo., on Friday.

His comments will be closely watched for indications the central bank may unveil further stimulus, which has helped stocks in the past.

The Labor Department reported 374,000 Americans filed for initial jobless benefits last week, more than economists expected. The reading was the latest sign that job creation remains mild.

The prior week's figure was revised higher. U.S. personal spending in July rose the most in five months, meeting economists' expectations.

Personal incomes rose for the eighth straight month and matched economists' average forecast. Factory activity in the Midwest improved this month, according to the Kansas City Federal Reserve Bank's manufacturing composite index.

In corporate news, shares of Sears Holdings slid 7.9% after S&P Dow Jones Indices said late Wednesday the department-store chain would be leaving the benchmark S&P 500 index after markets close on Sept. 4. LyondellBasell Industries jumped 3.8%. The chemical company will replace Sears in the S&P 500.

Pandora Media surged 14% after the Internet radio company reported a break-even fiscal second quarter, beating expectations of a slight loss, and narrowed its loss forecast for the year while increasing its revenue outlook.

EUROPEAN STOCK MARKETS

Weak macroeconomic data knocked the air out of European stock markets Thursday, with miners, car makers and banks leading declines, while investors also awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke.

The Stoxx Europe 600 index lost 0.8% to close at 264.97, its lowest close since Aug. 3. The world's biggest advertising firm, WPP PLC, was among notable decliners in the pan-European index, off 1.6%, after cutting its revenue forecast for 2012 and reporting mixed first-half results.

In contrast, shares of French food retailer Carrefour SA jumped 6.7% as it narrowed its first-half loss from the year-earlier period.

ING Groep NV rose 2.6% as Bank of Nova Scotia agreed to buy ING Bank of Canada from its Dutch parent for 3.126 billion Canadian dollars ($3.159 billion).

Weak Japanese retail sales further added to market worries, underpinning concerns about slower global growth.

The number of unemployed Germans grew by a seasonally adjusted 9,000 in August, above analysts' expectations of an 8,000 rise.

The European Commission said its euro-zone economic-sentiment indicator fell to 86.1 in August from 87.9 in July, as all the sector indexes declined.

Banks, which tend to be among the biggest decliners in a negative trading environment, saw broad-based losses on most European bourses. In the U.K., HSBC Holdings PLC lost 1.1% and Barclays PLC fell 1.5%.

The FTSE 100 index slipped 0.4% to 5,719.45. Miners were also on the decline, as metals prices dropped. Rio Tinto PLC gave up 2.1% and BHP Billiton PLC dropped 3.3%.

French stocks were mostly lower, with Pernod Ricard SA down 2.4%. The drinks company reported a 10% rise in full-year profit, but missed analysts' expectations. The CAC 40 index fell 1% to 3,379.11. Germany's DAX 30 index closed 1.6% lower at 6,895.49. Car makers led declines. BMW AG lost 4.8%, Daimler AG gave up 5.5% and Volkswagen AG fell 4%.

ASIA-PACIFIC STOCK MARKETS

Asian markets fell Thursday ahead of Federal Reserve Chairman Ben Bernanke's speech at Jackson Hole.

Hong Kong's Hang Seng Index fell 1.2% to 19,552.91 because of renewed concerns over the Chinese economy, while local property developers made heavy losses due to concerns that the government could intervene to cool the property market. Cheung Kong lost 2.7% and Henderson Land Development slipped 3.4%.

There were more earnings from Chinese companies, with Agricultural Bank of China dropping 2.7% after reporting profits that were in line with expectations, while its capital position remained the weakest of China's big four banks.

Car maker Brilliance China Automotive Holdings rose 4% after reporting that its net profit jumped 42% year-on-year, driven by strong sales of BMW sedans and tough cost controls.

South Korea's Kospi lost 1.2% to 1906.38; index heavyweight Samsung Electronics was down 1.2%. Japan's Nikkei ended 1% lower at 8983.78, falling below the 9,000 mark for the first time since Aug. 15.

Shikoku Electric Power dropped 4% in Tokyo after saying Wednesday that it wouldn't pay a dividend for the fiscal first half, for the first time in 32 years, blaming deteriorating earnings resulting from delays in resuming operations at its nuclear power plant in Ehime Prefecture.

COMMODITIES

Base metals closed mostly moderately lower on the London Metal Exchange Thursday, paring the morning's gains as the U.S. dollar strengthened against the euro although prices remained largely rangebound as market watchers waited on the sidelines to see if a key announcement Friday from the U.S. Federal Reserve would do enough to give copper in particular a boost.

At the close, LME three-month copper was near flat and just 0.1% lower on the day at $7,565 a metric ton. Tin prices closed lower on the day once more as Indonesia's PT Timah's resumption of spot sales continued to weigh on prices.

U.S. crude futures fell Thursday as workers began to return to oil platforms in the Gulf of Mexico and investors awaited remarks Friday from Federal Reserve Chairman Ben Bernanke.

Light, sweet crude for October delivery settled 87 cents, or 0.9%, lower at $94.62 a barrel on the New York Mercantile Exchange, the lowest settlement in two weeks.

Brent crude on the ICE futures exchange for October delivery traded 29 cents higher at $112.83 a barrel. Gold prices slipped alongside the euro amid quiet trade as traders continue to bide time ahead of Mr. Bernanke's speech Friday.

The most actively traded contract, for December delivery, fell $5.90, or 0.4%, to settle at $1,657.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD.