US stocks dive 2% on growth worries

NEW YORK (AFP) - Wall Street stocks tumbled Thursday, losing about two per cent in a broad sell-off, as weak economic data from Germany heightened concerns about poor overseas growth.

At the market close, the Dow Jones Industrial Average stood at 16,659.25, down a heavy 334.97 points (1.97 per cent).

The broad-based S&P 500 shed 40.68 (2.07 per cent) at 1,928.21, while the tech-rich Nasdaq Composite Index lost 90.26 (2.02 per cent) at 4,378.34.

The indices dug deep into negative territory, wiping out gains from Wednesday's strong rally that had been driven in part by Federal Reserve policy meeting minutes suggesting the US central bank was willing to keep easy money flowing for some time to come.

The S&P VIX index that measures volatility, known as the "fear index", jumped more than 24 per cent to 18.76, its highest reading since February.

Negative news came from the eurozone, including trade data showing Germany suffered a massive 5.8 per cent drop in exports in August. Leading German think tanks also slashed their growth forecasts for the eurozone's largest economy.

While US economic data has generally improved, traders are worrying about a slowdown in Europe and Asia that is weighing on the global economy.

"Overriding everything is just the concern that European growth is weak and getting weaker," said William Lynch of Hinsdale Associates.