Wall Street equities retreated following mixed earnings and news that clinical trials were paused for leading coronavirus pharmaceuticals.

Across the Atlantic, the major indices finished lower, with London slipping 0.5 percent one day after revamping Covid-19 restrictions, and as official data showed Britain's unemployment rate had jumped to 4.5 percent.

Asian stock markets mostly closed lower, while oil prices rebounded from recent losses on news of rising crude imports in key global consumer China.

The dollar was higher against its main rivals.

"Risk appetite turned a tad sour today with stocks falling in Europe and Wall Street also pulling back," said market analyst Fawad Razaqzada at ThinkMarkets.

"It looks like the deteriorating Covid situation in Europe, as well as investor realization that US stimulus might be delayed further, is discouraging the bulls to step in at these lofty levels today," he added.

Worries about the development of a vaccine are playing on investors' minds following Johnson & Johnson's announcement that it had temporarily halted its trial after a participant fell sick.

The firm said serious adverse events were "an expected part of any clinical study, especially large studies," adding company guidelines allowed officials to pause a study to determine if the problem was related to the drug in question and whether to resume trials.

The news dealt a blow to hopes for an effective treatment for the disease, which has killed more than a million people, infected tens of millions and plunged the global economy into recession.

J&J's announcement was followed Tuesday afternoon by news that Eli Lilly had also paused a trial of a coronavirus antibody treatment out of safety concerns.

Meanwhile, the IMF said the global economic crisis will not be quite as grim as feared this year, but GDP will still contract 4.4 percent and the pandemic means the outlook remains uncertain.

In the latest development in the saga over US stimulus, Senate Majority Leader Mitch McConnell on Tuesday said lawmakers would vote on a small businesses loan program to help firms damaged by the coronavirus pandemic.

Democrats controlling the House of Representatives, which this month approved a $2.2 trillion package, have said they will not agree to small bills like McConnell's.

Executives from large US banks said additional support was needed for the coronavirus-ravaged economy.

Hopes for a vaccine have been dealt a blow by news Johnson & Johnson had halted a trial after a volunteer fell ill
Hopes for a vaccine have been dealt a blow by news Johnson & Johnson had halted a trial after a volunteer fell ill POOL / LEWIS WHYLD

"It's important and it needs to happen as quickly as possible," said Citi Chief Financial Officer Mark Mason, who added that massive spending from Washington has helped avert a tidal wave of delinquencies so far.

"The longer we go without some kind of vaccine that's been tried and tested, the greater the need for additional stimulus."

New York - Dow Jones: DOWN 0.6 percent to 28,679.81 (close)

New York - S&P 500: DOWN 0.6 percent at 3,511.93 (close)

New York - Nasdaq: DOWN 0.1 percent at 11,863.90 (close)

London - FTSE 100: DOWN 0.5 percent at 5,969.71 (close)

Frankfurt - DAX 30: DOWN 0.9 percent at 13,018.99 (close)

Paris - CAC 40: DOWN 0.6 percent at 4,947.61 (close)

EURO STOXX 50: DOWN 0.6 percent at 3,279.19 (close)

Tokyo - Nikkei 225: UP 0.2 percent at 23,601.78 (close)

Shanghai - Composite: FLAT at 3,359.75 (close)

Hong Kong - Hang Seng: Closed because of typhoon

Euro/dollar: DOWN at $1.1745 from $1.1813 at 2100 GMT

Pound/dollar: DOWN at $1.2935 from $1.3064

Dollar/yen: UP at 105.45 yen from 105.33 yen

Euro/pound: UP at 90.78 pence from 90.42 pence

West Texas Intermediate: UP 2.0 percent at $40.20 per barrel

Brent North Sea crude: UP 1.8 percent at $42.45 per barrel