By Riva Gold 

Global stocks staged a sharp retreat Thursday as a cautious tone from the Federal Reserve, downbeat company news and a fresh fall in oil prices fueled anxiety about the health of the world economy.

The Stoxx Europe 600 fell as much as 3.9% to its lowest level since October 2014 as banking and mining shares tumbled.

Stock futures pointed to a 1.8% opening loss for the S&P 500. Changes in futures don't necessarily reflect market moves after the opening bell.

Investors also shed stocks in Asia and piled into havens such as gold and government bonds, while the yen hit its highest level against the dollar since October 2014.

As investors sought safety, NYMEX gold soared 3.5% to $1235.20 a troy ounce and 10-year U.S. Treasury bonds plunged to 1.57%. Yields fall as prices rise.

Federal Reserve Chairwoman Janet Yellen on Wednesday highlighted risks to growth and inflation, but delivered a less dovish tone on interest rates than many investors had hoped for.

Ms. Yellen's statements "do not appear to take all of 2016 off the table [for rate rises]," said Bill Northey, chief investment officer at the Private Client Group at U.S. Bank. Ultralow interest rates boosted asset prices for several years.

Wall Street gave up early gains after Ms. Yellen's testimony to end lower for a fourth consecutive day.

In Europe, banking shares fell nearly 6% after a brief bout of relief in the previous session, taking losses for the year to 28%.

The sector has been especially hard this year amid uncertainty around central-bank policy, global growth, China's currency and the oil price.

"The losses in energy and emerging markets are feeding into European and U.S. banks," said Bo Christensen, chief analyst at Danske Invest, which manages approximately $116 billion in assets. Mr. Christensen said investors are questioning whether the concerns will morph into a systemic banking crisis, though he doesn't believe they will.

French bank Société Générale SA on Thursday reported a jump in net profit, but warned that it may fall short of its profitability target this year. Shares were down 13%.

Shares in Credit Suisse fell 7.9%, while shares UniCredit fell 7.9% and Greece's Eurobank Ergasias fell over 26%.

European banks are suffering from low interest rates, which pressure net interest margins, while risks from losses in emerging markets and the fallout from steep losses in energy and high-yield debt compound the worries.

Europe's basic-resources sector also fell sharply Thursday after mining giant Rio Tinto PLC swung to an annual loss and scrapped its commitment to maintaining or steadily increasing its dividend each year amid a sharp downturn in commodity prices. Shares in the miner were down 5%.

In commodities, Brent crude oil was down 1.3% at $30.43, while WTI crude futures fell 2.7% to $26.70, despite a drawdown in U.S. stockpiles.

Recent falls in oil prices have fueled concerns among investors about the strength of the global economy, as well as possible spillover effects from bankruptcies in the energy sector and declines in energy-dependent economies.

"We're stuck in a nexus where the feedback loop from lower commodity prices is negative to all equities and banks," said Mr. Christensen. "It's just a lot of bad news coming at a point in time when markets are very skittish," he added.

Earlier, Hong Kong's Hang Seng Index fell 3.9%, catching up with the week's selloff as the market reopened from a holiday.

Japan's Nikkei Stock Average and China's Shanghai Composite Index were both closed, but investors continued to pile into the yen, which tends to rise in times of market stress. The dollar was down 1.8% against the yen at Yen111.28.

It is the sharpest percentage decline over such a short period since October 2008, said Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi, adding the sharp strengthening of the yen is fueling speculation that Japanese authorities could intervene directly to dampen volatility.

In other currencies, the euro was up 0.4% against the dollar at $1.1325, its highest since October.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

February 11, 2016 07:27 ET (12:27 GMT)