Wall Street, Europe Slip after Chinese Selloff

New York: A 6 per cent tumble in Chinese shares on Tuesday and disappointing earnings from Wal-Mart dented U.S. equities while copper and oil prices touched multi-year lows.

Wal-Mart Stores Inc fell 3.2 per cent to $69.63 as the biggest drag on the Dow after the major retailer reported weaker-than-expected quarterly earnings and lowered its full-year forecast.

"There is no real good news that would allow this market to break out," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

"A name like Wal-Mart today is part of what keeps the market kind of range bound, there are just too many companies with international businesses that are not really firing on all cylinders and then you throw in moves in China."

A broad measure of Asian stocks fell to its lowest in two years and Wall Street traded lower as the Chinese yuan weakened against the dollar, sparking renewed fears that Beijing may be intent on a deeper devaluation of the currency.

The Dow Jones industrial average fell 41.22 points, or 0.23 per cent, to 17,503.96, the S&P 500 lost 6.16 points, or 0.29 per cent, to 2,096.28 and the Nasdaq Composite dropped 26.84 points, or 0.53 per cent, to 5,064.86.

Earlier, China's main Shanghai Composite and Shenzhen 300 indexes both lost more than 6 per cent as investors bet demand in China will cool further.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.2 per cent after hitting its lowest since July 2013. Japan's Nikkei dipped 0.3 per cent.

MSCI's all-country world stock index lost 0.37 per cent.

Britain's FTSE 100 closed down 0.4 per cent. The pan-European FTSEurofirst index of 300 leading shares managed a gain of 0.2 per cent, erasing earlier declines. Germany's lost 0.2 per cent and France's CAC 40 fell 0.3 per cent.

The worries over China came on a day when trade in the yuan was relatively calm after Beijing fixed the currency's exchange rate marginally higher for the third successive session.

China's central bank on Tuesday set the yuan's midpoint near Monday's closing price at 6.3966 per U.S. dollar. In the spot market, the yuan closed flat at 6.3938.

Concerns about slowing growth in China also hit commodities, as benchmark copper prices slid to a six-year low of $4,983 a tonne, to pierce the psychological $5,000 level, and were last down 1.8 per cent at $5,022 a tonne.

Brent oil futures were down 0.1 per cent to $48.67 per barrel, edging closer to a six-month intraday low of $48.24 touched last week.

However, U.S. crude futures rebounded from a near 6-1/2-year low to trade up 1.5 per cent to $42.49 on bullish U.S. housing data and bets for an inventory decline, as well as short covering ahead of the front-month contract expiration on Thursday.

Investors will look to U.S. inflation data and minutes of the latest Federal Reserve monetary policy meeting on Wednesday, as they look for clues when the Fed will begin raising interest rates.

Most investors are expecting a rate hike will occur by the end of year. Benchmark 10-year Treasury notes were last down 9/32 in price to yield 2.1819 per cent.