Global Stocks

European stocks closed in negative territory Tuesday as bank shares came under pressure, leading the way lower.

The Stoxx Europe 600 SXXP, -1.29% fell 1.3% to end at 335.47.

Among banks, shares of Commerzbank AG CBK, -8.40% sank 9.2% as the German lender warned it won't hit its target of stable net profit for the full year.

Meanwhile, Italy's Banca Monte dei Paschi di Siena BMPS, -16.10% lost 16%. The shares had rallied during Monday's session after the bank's board late Friday approved a privately backed rescue plan for nonperforming loans at the embattled bank.

But BMPS still fared the worst among the 51 banks in the European Banking Authority's stress tests, released late Friday. The Italian banking sector was highlighted as one of the weaker spots in Europe's financial landscape.

U.S. stocks bounced off session lows but still closed lower Tuesday, marking the seventh straight daily loss for the Dow industrials and ending a five-day win streak for the Nasdaq, as investors sifted through quarterly results as well as data on personal income and inflation.

The Dow Jones Industrial Average DJIA, -0.49% fell as much as 157 points but ended with a decline of 90.74 points, or 0.5%, at 18,313.77/

The S&P 500 Index SPX, -0.64% settled with a loss of 13.81 points, or 0.6%, at 2,157.03, paring an earlier 23-point decline, with nine out of 10 main sectors trading lower, led by the consumer-discretionary and industrial sectors.

The Nasdaq Composite Index COMP, -0.90% took the worst of the fall, dropping 46.46 points, or 0.9% to finish at 5,137.73/

Asian shares bowed lower on Wednesday while the yen lorded over a weakened U.S dollar as talk the Bank of Japan may retreat from its massive bond-buying campaign twigged a shakeout in debt markets globally.

Worryingly for energy shares, the broad-based decline in the dollar was still not enough to spare U.S. crude oil from its first finish under $40 a barrel since April.

Japan's Nikkei .N225 lost 1.4 percent as the rising yen pressured exporter stocks while financials slid 2.7 percent.

The sharpest moves were in sovereign bond markets where a sudden spike in yields stirred speculation that a multi-year bull run in prices might finally be nearing its end.

Japanese bonds have suffered their worst sell-off in more than three years as investors feared the BoJ was out of easing ammunition and might leave it to fiscal policy to stimulate the economy.

Brent crude LCOc1 was near four-month lows on Wednesday at $41.86 a barrel. NYMEX crude CLc1 edged up 15 cents but at $39.66 was still under the psychological $40 level.