Earlier, news of the collapse of the summit between U.S. President Donald Trump and North Korean leader Kim Jong Un on denuclearization triggered flight-to-quality bids in lower-risk assets such as the Swiss franc.

Data showed that Chinese factory activity contracted to a three-year low and China’s export orders fell at their fastest pace since the global financial crisis a decade ago, adding to ongoing worries about a slowdown in the Chinese economy and its impact on global markets.

"There’s been a lot of stimulus measures in China, and it’s still not showing up in the numbers as soon as people would like," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

Receding optimism on the U.S.-China trade talks also dampened sentiment.

U.S. Trade Representative Robert Lighthizer said his office was taking legal steps to implement Trump’s announcement on Sunday to delay a tariff increase on more than $200 billion worth of Chinese goods that had been scheduled to take effect on Friday. But Lighthizer’s office later issued a statement saying that it was not abandoning the threat of increasing the tariffs to 25 percent from 10 percent.

On Wall Street, data showing better-than-expected U.S. economic growth in the fourth quarter helped offset worries over China. Gross domestic product rose 2.9 percent for the year, just shy of the 3 percent goal set by the Trump administration.

"The numbers came out in a pretty robust way," said Mona Mahajan, U.S. investment strategist at Allianz Global Investors in New York. "There hasn’t been much reaction because of the geopolitical uncertainty in the headlines."

The U.S. economic data also prompted a rise in Treasury yields and a retreat in gold prices.

Benchmark 10-year U.S. Treasury notes last fell 8/32 in price to yield 2.7222 percent, from 2.693 percent late on Wednesday.

Spot gold dropped 0.5 percent to $1,313.20 an ounce.

Pulling back

Global equities scaled a four-month high earlier this week, helped by upbeat expectations about the U.S.-China trade talks. But on Thursday, the MSCI All-Country World Index dropped 0.4 percent to notch a third day of losses, albeit modest ones.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 25, 2019. Photo by Reuters/Brendan McDermid

The Dow Jones Industrial Average fell 69.16 points, or 0.27 percent, to 25,916, the S&P 500 lost 7.89 points, or 0.28 percent, to 2,784.49 and the Nasdaq Composite dropped 21.98 points, or 0.29 percent, to 7,532.53.

MSCI’s gauge of emerging markets stocks fell 1.0 percent.

According to equity market analysts in Reuters polls, global stock markets in 2019 will at best only recoup losses from the deep sell-off late last year. They see the risk skewed more toward a sharp fall by mid-year.

"The expectation is that we’ll probably chop sideways until we get substantial news," said Robert Phipps, director at Per Stirling Capital Management in Austin, Texas.

In currency markets, the dollar index, which measures the greenback against a basket of six major currencies, was little changed. The dollar was also nearly flat against the euro.

The Swiss franc rose 0.4 percent against the dollar, rising following the news of the end of the summit between Trump and Kim.

The Japanese yen hit a 10-month low against the dollar and was last down 0.4 percent.

Brent crude settled down 36 cents, or 0.54 percent, at $66.03 a barrel. U.S. West Texas Intermediate crude settled up 28 cents, or 0.49 percent, at $57.22 a barrel.