1st LD Writethru: U.S. stocks decline following global rout

U.S. stocks ended lower Thursday as investors rushed to safe-haven assets amid a global rout in equity markets.

The Dow Jones Industrial Average dropped 254.56 points, or 1.60 percent, to 15,660.18. The S&P 500 lost 22.78 points, or 1.23 percent, to 1,829.08. The Nasdaq Composite Index fell 16.75 points, or 0.39 percent, to 4,266.84.

Europe stocks were dragged down by the banking sector amid growing uncertainty surrounding interest rates and non-performing loans, with French benchmark index CAC 40 diving 4.05 percent.

In Asia, Hong Kong's Hang Seng Index fell 3.9 percent as the market reopened after the extended holiday, catching up with the week's turmoil.

With no major economic report due Wednesday, investors were still digesting U.S. Federal Reserve Chair Janet Yellen's comments.

"With gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in coming years and that labor market indicators will continue to strengthen," Yellen said in a testimony before the Committee on Financial Services of the U.S. House of Representatives on Wednesday.

But she acknowledged that financial conditions have become less supportive of growth, "with declines in broad measures of equity prices, higher borrowing rates for riskier borrowers, and a further appreciation of the dollar."

Yellen's testimony failed to offer any signal on whether the central bank will change the interest rate on its next policy meeting on March 15-16. She only repeated that the actual path of the interest rate will depend on incoming data.

Analysts thought Yellen's remarks hinted that the U.S. central bank still keeps door open to further interest rate hikes, but flagging risks could delay any further moves. Endit