World stocks fell for a fifth day on Wednesday as worries about a double-dip recession persisted, while the yen eased from a 15-year high on speculation that Japan may intervene to weaken its currency.
Data from the United States showed the housing sector continues to suffer and in Europe, Standard & Poor's sent a reminder of the problems that euro zone economies face in managing their debt, cutting Ireland's credit rating.
U.S. stocks lost ground on Wednesday after data showed single-family home sales fell in July to set their slowest pace on record, while prices were the lowest in more than 6-1/2 years, implying further loss of momentum in the economic recovery.
The new home sales data follows a report on Tuesday that showed sales of existing homes dropped by a record rate to a 15-year low.
The Dow Jones industrial average was down 64.25 points, or 0.64%, to 9,976.20. The Standard & Poor's 500 fell 8.31 points, or 0.79%, to 1,043.56. The Nasdaq Composite lost 13.16 points, or 0.62%, to 2,110.60.
World equities measured by the MSCI All-Country World Index dropped 0.5%, down for a fifth straight session, and the Thomson Reuters euro zone peripheral index lost 0.8%.
In Europe, S&P's one-notch cut in Ireland's rating overshadowed a better than expected German business morale reading for August from the Ifo think tank.
"The Ireland downgrade was not too much of a surprise but it is still weighing on sentiment," said Joshua Raymond, market strategist at City Index in London.
The view that the economic recovery was fading fast led investors to pile into U.S. Treasury bonds, seen as a safe-haven investment in times of economic uncertainty. Slowing growth also means there will be little inflationary threat to longer-dated Treasuries.
YEN SELLING
Japan's Nikkei business daily reported Japan's Ministry of Finance may intervene on its own to sell yen if speculators drive up the currency. The dollar has lost nearly 9% against the yen this year.
Finance Minister Yoshihiko Noda reinforced that view, telling reporters that recent yen moves were one-sided and Tokyo will respond appropriately when necessary.
Some said it was unlikely the Japanese would intervene at current levels.
"I think it's unlikely there would be intervention much above 80 yen," said Ray Farris, chief currency strategist at Credit Suisse in London. "The yen is not overvalued by our estimates."
The dollar was up 0.4% at 84.56 yen, and up 0.2% against a basket of currencies. The yen also fell from a nine-year peak against the euro.
Tokyo's Nikkei average had lost 1.7% to hit a 16-month closing low on disappointment over the lack of policy action by the authorities to rein in the strong yen, which threatens Japan's fragile economic recovery.
The FTSEurofirst 300 index of leading European shares was down 0.5%, having been in positive territory earlier after the Ifo data, which also boosted the euro.
Crude oil prices edged up from a seven-week low but were still below $72, with copper 0.2% lower.
Gold gained 0.5%, and earlier hit an eight-week high.
