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.

US 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 Dow Jones Industrial Average was down 64.25 points, or 0.64 percent, to 9,976.20. The Standard & Poor's 500 fell 8.31 points, or 0.79 percent, to 1,043.56. The Nasdaq Composite lost 13.16 points, or 0.62 percent, to 2,110.60.

World equities measured by the MSCI All-Country World Index dropped 0.5 percent, down for a fifth straight session, and the Thomson Reuters euro zone peripheral index lost 0.8 percent.

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.

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 percent 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.

The dollar was up 0.4 percent at 84.56 yen, and up 0.2 percent 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 percent 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 percent, having been in positive territory earlier after the Ifo data, which also boosted the euro.

Gold gained 0.5 percent, and earlier hit an eight-week high.

US crude oil futures on Wednesday rebounded from an 11-week low and five days of losses as the market shrugged off government data showing across-the-board rises in crude oil and product inventories last week.

US crude for October delivery was up 64 cents at $72.28 a barrel at 1:58 p.m. EDT (1758 GMT), after earlier falling as low as $70.76, the lowest price since early June.

October ICE Brent rose 88 cents to $73.26 a barrel.

Data from the US Energy Information Administration showed crude inventories rose 4.11 million barrels in the week to Aug. 20, dwarfing a forecast for a build of 200,000 barrels.

However, crude oil inventories at the key Cushing, Oklahoma, delivery hub fell 779,000 barrels to 36.3 million barrels, about the only bullish feature in the weekly report.

Gasoline inventories were 2.27 million barrels higher, at odds with forecasts of a small drawdown. Distillate stocks increased by a higher than expected 1.76 million barrels.