Asian stock markets have fallen as gloomy economic reports from the world's two biggest economies heightened fears of a sharper global downturn.
The US Labour Department reported on thursday that the four-week average of applications for unemployment benefits jumped to the highest level in nine months. Meanwhile, sales of previously owned homes fell 1.5% in May.
A further sign of weakness came from the Philadelphia branch of the Federal Reserve, which issued a report showing that manufacturing in the north-east had experienced a sharp decrease due to a steep fall in company orders.
Appetite for financial assets such as stocks was also dented by the results of a monthly HSBC survey, which showed that manufacturing in China has continued to contract. China's growth has been a pillar of the global economy in recent years, so its slowdown has been of particular concern to investors.
Meanwhile, in-fighting over Europe's heavy debt burden continued to brew, leading IMF head Christine Lagarde to warn that the euro is under "acute stress" and to urge leaders of the 17 countries that use the currency to consider steps such as jointly issuing debt.
Japan's Nikkei 225 index fell 0.6% to 8,774.77 and South Korea's Kospi slid 2% to 1,851.47. Hong Kong's Hang Seng Index fell 1.1% to 19,050.13 and Australia's S&P/ASX 200 was down 1% at 4,045.80.
Falling commodities prices hurt mining and raw materials shares in Australia. BHP Billiton, the world's largest mining company, fell 2.5%. Newcrest Mining Ltd dropped 3% and OZ Minerals Ltd lost 3.8%.
Sentiment was also shaken after Moody's Investors Service lowered the credit ratings of 15 major banks, including Bank of America, JPMorgan Chase and Goldman Sachs, saying their long-term prospects for profitability and growth are shrinking.
on Thursday, the Dow Jones industrial average plunged 251 points, its second-worst loss of the year. The Dow lost 2% to close at 12,573.57. The Standard & Poor's 500 index lost 2.2% to 1,325.51 and the Nasdaq composite fell 2.4% to 2,859.09. All three indexes lost their gains for the week.
Benchmark oil for August delivery rose 31 cents to 78.51 dollars per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 3.25 dollars, or 4%, to settle at 78.20 dollars per barrel in New York.