Stocks hit by earnings, data

US stocks suffered their worst day in eight weeks on Wednesday as lackluster earnings and weak economic data hit investors already nervous about faltering debt talks in Washington, while the US dollar rebounded following a sell-off this week.

The Dow Jones industrial average ended down 198.75 points, or 1.59 percent, at 12,302.55. The Standard & Poor's 500 Index was down 27.05 points, or 2.03 percent, at 1,304.89. The Nasdaq Composite Index lost 75.17 points, or 2.65 percent, to 2,764.79.

Financials led Britain's top share index lower, on concerns that deeply-divided US lawmakers would fail to agree to a deal to avoid a default on the country's debts.

The FTSEurofirst 300 ended down 1.1 percent. European shares have also been hit by persistent fears of contagion in the euro zone debt crisis.

The Nikkei stock average fell today as concerns mount over a deadlock in talks to raise the US debt ceiling, but expectations of improved Japanese corporate earnings could help it stay near four-month highs. The benchmark Nikkei closed down 0.5 percent at 10,047.19. But it is still up 2.4 percent so far this month and not far from its post-quake high of 10,207.91 hit earlier this month.