Investors fled for the safety of US Treasuries and gold, sending the yield on the 30-year Treasury bond to its lowest level since April 2009 and driving gold to a seven-week high in New York.

In mid-day New York trade, the Dow Jones Industrial Average was down 167.94 points, or 1.61 percent, at 10,247.60. The benchmark Standard & Poor's 500 Index was down 20.05 points, or 1.83 percent, at 1,074.11 and the Nasdaq Composite Index was down 39.00 points, or 1.76 percent, at 2,176.70.

On the other side of the Atlantic, European shares hit a one-month closing low. The FTSEurofirst 300 index of top European shares fell for a second straight session and ended down 1.5 percent at 1,036.84 points, the lowest close since July 21.

The disappointing economic numbers put pressure especially on financial and commodity shares, with the STOXX Europe banking index, the basic resources index and the oil and gas index falling 1.9 to 2 percent.

Overall, the MSCI All-Country World equity index fell 1.19 percent after hitting its highest in more than a week earlier on the session.

Latin America stocks were pressured by concerns about slowing growth in the United States, which is Mexico's top trading partner and a major influence on the region.

The dollar was down 0.08 percent at 85.13 yen, off a session low of 84.90 touched after the Philly Fed factory data, but still off a 15-year low of 84.72 yen hit on trading platform EBS last week.

The dollar also fell more than 1 percent versus the Swiss franc to trade as low as 1.0295, a level last seen Jan. 19, according to Reuters data.

But the euro was down 0.37 percent at $1.2808 from a previous session close of $1.2855.

In energy and commodities prices, US light sweet crude oil fell $1.23, or 1.63 percent, to $74.19 per barrel, and spot gold prices rose $2.45, or 0.20 percent, to $1231.00. The Reuters/Jefferies CRB Index was down 1.73 points, or 0.64 percent, at 268.17.

Copper prices dropped from a two-week high on the London Metal Exchange to trade at $7,352 a ton from $7,390 a ton at the close on Wednesday, while oil dropped below $75 per barrel.

Meanwhile, banks in Kuwait rose on Thursday after reports that the government gave a green light to local lenders to finance a 30 billion dinar development plan and is prepared to back them with guarantees. The Kuwaiti index advanced 0.4 percent to 6,682 points.

Port operator DP World, which is listed on the Nasdaq Dubai, extended its gains, hitting a 15-week high, one day after posting its half-year results.

Property stocks led Dubai and Abu Dhabi to end higher. The Abu Dhabi index edged up 0.4 percent to 2,506 points.

Heavyweight Emaar Properties gained 1.9 percent despite a price target cut from HC Research.

HC cut its price target for Emaar to 4.7 dirhams from 6.6 dirhams to reflect international project scale backs, but maintained a buy rating.

In Abu Dhabi, Sorouh Real Estate and Aldar Properties dominated trading, advancing 2.5 and 2.3 percent respectively.

The Qatari index rose 0.5 percent to 7,115 points.

The Omani index rose 0.5 percent to 6,328 points.

The Bahrain index fell 0.3 percent to 1,409 points.