US shares fall on global growth fears

(Close): US stocks closed lower on Thursday as investors sought safe havens amid fresh fears about the state of the global economy.

Wall Street followed European and Asian markets, which plunged after US Federal Reserve chair Janet Yellen warned growth in the US could be hit by global economic turmoil.

The Dow Jones industrial average was down 254.56 points to 15,660.18.

The S&P 500 fell 1.2% to 1,829.08 and the Nasdaq lost 0.4% to 4,266.84.

Ms Yellen testified before a senate hearing for a second day on Thursday, saying she had no intention to follow European central banks and impose a negative interest rates.

The Swedish central bank's move to further lower negative interest rates to -0.5% on Thursday added to fears over the banking sector.

On Wednesday, Ms Yellen said the economic situation in the US was not as clear as it was in December, when the Fed raised interest rates for the first time in nearly a decade.

Goldman Sachs and JP Morgan shares both fell 4.4%, while Bank of America shares were nearly 7% lower.

Morgan Stanley shares were down 4.5%. The Wall Street bank announced it had reached a final $3.2bn deal with US regulators over mortgage backed bonds it sold in the lead up to the financial crisis.

Airplane maker Boeing saw its share price fall 6.8% on reports that the company was under investigation over accounting manoeuvres that may have overstated its profitability outlook.