European stocks were sharply lower after a survey of regional executives showed that business activity slowed in February. Markets were down 2 percent in Germany and France and 3 percent in Italy.
In the U.S., the government said more people applied for unemployment benefits last week. The four-week average rose to the highest in six weeks.
The Dow Jones industrial average was down 53 points to 13,874 at midday Thursday.
The Standard & Poor's 500 index dropped eight to 1,503. The Nasdaq composite lost 26 to 3,138.
Wal-Mart Stores rose after beating analysts' profit expectations in the fourth quarter.