Stocks on both sides of the Atlantic fell as worse-than-expected euro zone manufacturing data bolstered concern its economic recovery might take longer than feared.
The Markit Eurozone PMI Composite Output Index dropped to 46.5 in March, from 47.9 in February, according to the flash estimate. Flash Germany Manufacturing PMI dropped to 48.9 in March, a three-month low and down from 50.3 in February.
"The flash PMI data suggest that the euro-zone business environment deteriorated at a quickening rate in March," Chris Williamson, chief economist at Markit, said in a statement. "The concern is that the downturn has gathered pace again."
Meanwhile, the European Central Bank told Cyprus it has until Monday to come up with a plan to raise its 5.8-billion-euro share of a 10-billion-euro bailout plan; failure means the end of the ECB's emergency lifeline for the country's bleeding banks.
"Europe is in desperate need for growth, but today's bad PMI numbers are signalling a worsening of growth prospects," Witold Bahrke, who helps oversee US$55 billion as senior strategist at PFA Pension in Copenhagen, told Bloomberg News. "This, combined with increasing political risk, is normally a recipe for renewed euro stress."