Global stocks hit by U.S. data, commodities fall

Government bond futures rebounded after a report showed U.S. Mid-Atlantic factory activity crashed to an 18 year low in October, adding to the toll the global credit crisis has taken on economic growth.

The U.S. dollar pared gains on the data, U.S. stocks fell more than 2.0 percent and European stocks extended losses, with key indexes down more than 4.0 percent.

Fear of slowing global economies slammed commodity prices. Copper fell almost 8.0 percent to a 33-month low, gold tumbled more than 5.0 percent and crude oil slid to a new 13-month low near $71 a barrel, less than half its July peak of more than $147.

'It is one for the record books, or just about,' Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, said of the factory activity report.

'It is a sign that the economy is falling away quickly, and it is certainly consistent with the recession that we seem to be in,' Rupkey said.

In early morning trade, the Dow Jones industrial average was down 188.21 points, or 2.19 percent, at 8,389.70. The Standard & Poor's 500 Index was down 22.02 points, or 2.43 percent, at 885.82. The Nasdaq Composite Index was down 32.33 points, or 1.99 percent, at 1,596.00.

Declines were beating advancing stocks on the New York Stock Exchange by almost 3 to 1.

The economic data overshadowed a decline in most of the short term lending rates overnight, indicating that efforts by the central banks to loosen up credit may be working in the key short-term market.

Fresh signs of a looming worldwide economic slowdown let Japan's Nikkei suffer its worst one-day losses since the stock market crash of October 1987.

The benchmark 10-year U.S. Treasury note was down 2/32 in price to yield 3.96 percent , while the 2-year U.S. Treasury note fell 1/32 in price to yield 1.56 percent.

The U.S. dollar rose against a basket of major currencies, with the U.S. Dollar Index up 0.40 percent at 82.59.

The euro fell 0.49 percent at $1.3394, and against the yen, the dollar was up 0.96 percent at 100.55.

U.S. light sweet crude oil fell $1.95 to $72.59 a barrel.

Spot gold prices fell $48.30 to $799.70 an ounce.