BANGKOK (AP) -- World stock markets fell Thursday as signs of weakness in the world's two biggest economies kept investors at bay.
Benchmark oil lingered near $105 a barrel. The dollar fell against the euro and the yen.
Caution in markets stemmed from U.S. Commerce Department data that showed orders for durable goods rose 2.2 percent in February. While that compared favorably to a steep drop in January, analysts had expected orders to increase 2.7 percent.
"U.S. data shows weakness in the economic recovery. That really confirms what the Fed Chairman, Bernanke, said last week that the Federal Reserve has to continue loose monetary policy in order to aid economic recovery and employment," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.
Investors are also concerned that China's slowdown is accelerating. China is a huge importer of raw materials, so a slowing economy there can weigh on prices for raw materials.
European stocks were muted in early trading. Britain's FTSE 100 was 0.4 percent lower at 5,787.75. Germany's DAX lost 0.4 percent to 6,971.46 and France's CAC-40 slipped 0.1 percent to 3,425.29.
Wall Street futures headed lower as traders awaited weekly jobless claims later in the day. Dow Jones industrial futures fell slightly to 13,049 while S&P 500 futures lost less than 0.1 percent to 1,399.50.
Japan's Nikkei 225 index retreated for a second day after reaching a one-year high, falling 0.7 percent to 10,114.79.
Hong Kong's Hang Seng tumbled 1.3 percent to 20,609.39 and South Korea's Kospi dropped 0.9 percent to 2,014.41. Australia's S&P/ASX 200 dipped 0.1 percent to 4,337.90.
The prospect of slowing growth from the world's two biggest economies pummeled industrial, energy and materials stocks.
Hong Kong-listed Aluminum Corp. of China shed 1.3 percent. CNOOC Ltd., China's main offshore oil and gas producer, tumbled 3.3 percent despite reporting that its 2011 profit rose 29.1 percent on higher oil and gas sales. Hyundai Heavy Industries Co., South Korea's leading shipbuilder, fell 3 percent.
Leighton Holdings plummeted 6.7 percent in Sydney after the Australian construction company cut its full year profit forecast because of losses in several major infrastructure projects.
Mainland Chinese shares spiraled downward amid dwindling hopes for a looser monetary policy, analysts said.
The benchmark Shanghai Composite Index lost 1.4 percent to 2,252.16 and the Shenzhen Composite Index lost 1.6 percent to 895.07. Shares in nonferrous metals, engineering and materials weakened.
Analysts said investors are also holding back as they await news later this week on Europe's progress in resolving its debt crisis.
Benchmark crude oil was up 1 cent to $105.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.92 to end at $105.41 per barrel on the Nymex on Wednesday. Oil prices declined after France's government said it is considering a release of emergency stockpiles as part of a U.S.-led effort to ease the recent climb in prices.
In currencies, the euro rose to $1.3326 from $1.3324 late Wednesday in New York. The dollar fell to 82.41 yen from 82.79 yen.
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AP researcher Fu Ting contributed from Shanghai.