US open: Stocks decline on worries about global economy

US stocks fell on Thursday as the Federal Reserve raised concerns about the global economy.

The Dow Jones Industrial Average declined 1.29%, the Nasdaq slid 0.83% and the S&P 500 dropped 1.23% at 1456 GMT.

Federal Reserve chair Janet Yellen on Wednesday said in a prepared speech that financial conditions have become less supportive of economic growth, the slowdown in China could weigh further on the US and the outlook for inflation is falling.

"It's not all rosy in Yellen's eyes. Market volatility is a major consideration," said IG market strategist Bernard Aw.

While she did not specifically address interest rates, her remarks were seen to suggest that the next increase to the benchmark rate is a while off.

The central bank chair was due to speak again at 1500 GMT, appearing before the Senate Banking Committee.

Another drop in oil prices also weighed on markets, with West Texas Intermediate down 1.9% to $26.96 per barrel and Brent down 0.68% to $30.63 per barrel at 1455 GMT.

In economic data, the Labor Department revealed initial jobless claims fell to 269,000 in the week to 6 February from 285,000 in the previous week, less than the 280,000 claims forecast.

Elsewhere, Hong Kong stocks returned from their Chinese New Year holiday on Thursday, and fell sharply as it caught up with the selloffs that had marked the week so far in Asia.

European stocks took a battering on Thursday, with banks and energy issues pacing the declines, as oil prices slid and investors fled to safety.

In company news, Twitter shares were in trouble after it reported flat growth in users for the fourth quarter on Wednesday night.

Cisco Systems jumped after second quarter results announced after the close beat expectations.

The dollar was up 0.65% against the pound, but had dropped 0.25% against the euro and 0.78% against the yen.