US Markets

U.S. stocks tumbled Wednesday as surprisingly poor demand at a German government-bond auction and weak Chinese data weighed on investor sentiment. The Dow Jones Industrial Average fell 160 points, or 1.4%, to 11333 in midday trading, after falling as many as 215 points. The Dow's early declines puts the index on pace for a third straight decline, following a two-day fall of 2.6% that left the Dow at a five-week low. With Wednesday's fall, the Dow has now given up half of its October rally, which saw the blue-chip index log its biggest month of gains since 2002.

The Standard & Poor's 500-stock index declined 18 points, or 1.5%, to 1170 and the Nasdaq Composite shed 43 points, or 1.7%, to 2479. All 30 Dow components and all 10 of the S&P 500 sectors trading in negative territory. Leading the losses were materials, financial and energy stocks. Bank of America, Alcoa and Hewlett-Packard each lost 2.8% or more. The declines were driven by worrying developments in Europe, where demand at Germany's auction of new 10-year government bonds was surprisingly weak, bringing the euro zone's debt fears closer to the core of the region. The disappointing demand lifted yields on Spanish and French government bonds as well.

The European Central Bank again bought Italian and Spanish bonds as confidence wavered. Also hurting bond-market sentiment were reports that Belgium can't pay its agreed share of the planned rescue of the Belgian-French bank Dexia, which is seen as placing more risk at the door of the French treasury and adding another threat to the country's triple-A credit rating. Belgian and French officials denied they are renegotiating the dismantling of Dexia.

In U.S. economic news, initial jobless claims ticked slightly higher last week after three consecutive declines, rising to 393,000. Orders for durable goods decreased 0.7% in October, while the September reading was revised sharply lower to a 1.5% drop, from an earlier estimate of a 0.6% decline. Consumer spending, meanwhile, slowed in October, growing just 0.1% after a 0.7% rise the month before, missing expectations. U.S. incomes rose 0.4% in October, following a 0.1% rise in the prior month.

In corporate news, shares of Deere climbed 3.8% after the farm and construction equipment maker reported fiscal fourth-quarter earnings and revenue the exceeded expectations. TiVo tacked on 1.3% after reporting fiscal third-quarter losses that were narrower than expected and revenue that exceeded estimates. Pandora Media slumped 6.3% after the online-radio company reported a fiscal third-quarter profit versus expectations of a loss but indicated that its current-quarter loss could be wider-than-anticipated.

European Markets

European stock markets dropped Wednesday, with investors rattled by a disappointing German bond auction and a weak Chinese manufacturing report. The Stoxx Europe 600 index fell 1.3% to 220.31. The losses came after a poorly received German 10-year-bond auction, in which the Bundesbank had to pick up the slack to bring the sale to a planned EUR6 billion.

The German DAX 30 index fell 1.4% to 5,457.77, with HeidelbergCement AG down 3.7%. Shares of Commerzbank AG rose 1.7%, partially rebounding from the previous session's sharp losses sparked by media reports that the institution may need more capital. In Italy, the FTSE MIB index dropped 2.6% to 13,915.78, pressured by losses for bank shares. Mediobanca dropped 7.9% and Intesa Sanpaolo SpA fell 3.7%.

A downbeat manufacturing survey from China weighed on stocks sensitive to global growth indications, with car maker Volkswagen AG down 4.4%. It also hit luxury-goods makers such as Burberry Group PLC, down 4.5%, and LVMH Moet Hennessy Louis Vuitton SA, off 2%. The U.K.'s FTSE 100 index fell 1.3% to 5,139.78, with mining stocks under pressure. Rio Tinto PLC fell 2.3%. Shares of energy group BP PLC gave up 2.2%.

Meanwhile, the Bank of Greece said the nation could be forced out of the euro, unless it meets all targets set out in an October agreement. The Greek ASE Composite index fell 1.2% to 675.93. Also Wednesday, French and Belgian bond yields jumped after a Belgian newspaper reported that the planned rescue deal for troubled Belgian-French financial institution Dexia SA could be on the verge of collapse because the Belgians will have trouble financing their share of the deal. A renegotiation could involve France taking on a larger portion of the financing, which observers said could threaten the country's triple-A rating. A spokesman for Dexia couldn't be reached for comment. Shares of Dexia rose 12.6% after tumbling in the prior session. France's CAC 40 index fell 1.7% to 2,822.43, with steelmaker ArcelorMittal SA down 4.2% and bank Societe Generale SA retreating 2.7%.

Asian Markets

Most Asian share markets traded with sizeable losses Wednesday after a poor manufacturing survey from China added to worries about the global growth trajectory. Hong Kong's Hang Seng Index fell 2.1% to 17,864.43, and China's Shanghai Composite Index swung from mild gains to finish down 0.7% at 2395.06. South Korea's Kospi fell 2.4% to 1783.10. Japan's markets were closed for a holiday. HSBC issued the November preliminary "flash" version of its monthly China manufacturing Purchasing Managers Index, which fell to a reading of 48.0, indicating a contraction, compared to a mildly expansionary 51.0 in October.

Banks were weaker in Hong Kong, with Industrial & Commercial Bank of China Ltd. down 2.8%, Bank of Communications Co. down 3.8%, Agricultural Bank of China Ltd. down 4.1%, and Bank of China Ltd. down 2.9%. Resource shares suffered, as commodity prices fell, with oil, platinum and aluminum futures all lower in electronic trading. In Hong Kong, Jiangxi Copper Co. fell 3.8%, Cnooc Ltd. traded down 3.2%, and Aluminum Corp. of China Ltd. lost 4.1%. In Seoul, Hyundai Steel Co. dropped 5.9% after Moody's late Tuesday revised the company's ratings outlook to negative. Hynix Semiconductor Inc. fell 6%, Samsung Electronics Co. fell 2.9%, and Woori Finance Holdings Co. finished down 3.3%.

Commodities

Base metals closed lower on the London Metal Exchange Wednesday, weighed down by a stronger dollar and fragile risk sentiment following a series of disappointing economic data releases. At the close, LME three-month copper was 1.2% lower on the day at $7,239 a metric ton.

Aluminum saw heavier declines, slipping below $2,050/ton for the first time since August 2010 before closing at $2,024/ton, down 2.2%. A series of disappointing economic data Wednesday did little to help base metal sentiment. Crude-oil futures pared losses Wednesday after a report showed U.S. oil inventories plunged last week. The closely watched survey from the Department of Energy wasn't enough to send futures into positive territory, but did pull them from their earlier lows. Light, sweet crude for January delivery settled down $1.84 at $96.17 a barrel on the New York Mercantile Exchange, bouncing back from a low of $95.35 reached earlier in the session.

Commercial oil stockpiles last week fell 6.2 million barrels last week, according to the DOE's Energy Information Administration. The decline came as refiners raised their utilization rate by 0.7 percentage point to 85.5% of capacity. Gold eased below $1,700 as investors moved to the dollar on euro-zone concerns, but futures recovered from their earlier losses as some traders viewed the declines as a good opportunity to buy.

The most actively traded gold contract, for December delivery, fell $6.50, or 0.4%, to settle at $1,695.90 a troy ounce on the Comex division of the New York Mercantile Exchange.