Stocks in the United States fell on Thursday, after earnings by Exxon Mobil fell short of Wall Street's expectations.
Coupled with a 2% slide in the price of oil, shares in Exxon Mobil Corp were down nearly 5%.
Government reports also showed weaker-than-expected second-quarter growth and a rise in the number of people applying for jobless benefits. Details of July payrolls are due on Friday.
The Dow Jones industrial average tumbled 205.67 points, or 1.78%, to 11,378.02.
Standard & Poor's 500 Index dropped 16.88 points, or 1.31%, to 1,267.38. The Nasdaq Composite Index slipped 4.17 points, or 0.18%, to 2,325.55.
For the month, the Dow was up 0.25%, while the Nasdaq finished July up 1.42%. The S&P 500 lost 1% in July.
Oil declined more than 11% in July - its biggest monthly slide since December 2004. On Thursday, the front-month US crude oil contract settled at $US124.08 a barrel, down $US2.69 for the day.
Trading volume was moderate on the New York Stock Exchange, with about 1.45 billion shares changing hands. Volume was high on the Nasdaq, where about 2.39 billion shares were traded.
Europe stocks flat
European shares ended flat on Thursday.
The FTSEurofirst 300 index of top European shares closed 0.06% lower at 1,180.04 points.
In other markets: the DAX index ended at 6479.56 points, up 19.44 or 0.3%. In Paris, the CAC-40 index closed at 4392.36 points, down 8.19 or 0.19%.
The Swiss market index closed at 7141.21 points, up 32.3 or 0.45%
In Britain, the FTSE 100 ended down 8.8 points, or 0.2%, at 5,411.9, after surging 1.9% on Wednesday.
Data showed British house prices fell at record rates and consumer confidence hit historic lows.
NZX withstands Warehouse fall
A plunge in The Warehouse share price failed to dent the New Zealand sharemarket on Thursday. The NZX 50 index was up 49 points to close at 3336 on turnover of $126 million.
Shares in The Warehouse fell 16% or 60 cents to $3.22 after the Court of Appeal blocked a bid by supermarket giants, Foodstuffs and Woolworths from making takeover offers for New Zealand's biggest retailer.
In Australia, Warehouse Group shares plunged A55c, or 18.27%, to $A2.46. Woolworths added A16c to $A25.20 on the news.
Telecom was up 13c to $3.81, Contact Energy rose 5c to $8.40, but Fletcher Building was down 2c to $6.38.
Auckland Airport rose 10c to $2.04, while Sky Network TV jumped 22c to $4.72.
PGG Wrightson was up 3c to $2.68 after it took a 51% stake in an animal health business in Uruguay - a move that it says will boost profit in its South American operations by 15%.
Australian market rises
In Australia, the sharemarket closed firmly in the black for the second consecutive day.
The benchmark S&P/ASX200 index finished up 40.7 points, or 0.82%, to 4,977.4 while the broader All Ordinaries surged 43.9 points, or 0.88%, to 5,052.6.
At 1620 AEST, the September share price index futures contract was up 76 points to 4,971 on a volume of 22,892 contracts.
At 1627 AEST, the spot price of gold was $US912.55 per fine ounce, down $US4.90 from Wednesday's Sydney close of $US917.45.
National turnover was 1.49 billion shares worth $A6.24 billion.
Topsy-turvy day in Japan
Japanese share prices closed marginally up on Thursday. The Nikkei-225 index gained 9.02 points or 0.07% to close at 13,376.81.
The broader Topix index of all first-section shares climbed 0.63 points or 0.05% to end at 1,303.62.