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(This March 13 story has been refiled to fix the day to Thursday, not Tuesday, in paragraph 1)
By Sinéad Carew and Harry Robertson
NEW YORK/LONDON (Reuters) - Global equities sank on Thursday with the S&P 500 confirming it was in a correction while U.S. Treasury prices rose as investors fled for safer assets as they worried that global trade tensions would boost inflation and slow growth after U.S. President Donald Trump's latest tariff threats.
On Thursday, for the first time, the benchmark S&P 500 finished more than 10% below its most recent record high close, achieved on February 19.
In the latest in a long list of tariff threats, Trump said he would hit European beverage imports with duties of 200% if the EU does not remove U.S. whiskey surcharges. This was after his increased tariffs on all U.S. steel and aluminium imports took effect on Wednesday.
Thursday's Labor Department's Bureau of Labor Statistics data showed U.S. producer prices (PPI) were unexpectedly unchanged in February and Wednesday's data showed consumer prices (CPI) rising more slowly than expected.
But last month's trends did little to reassure investors who were bracing for the impact of trade wars on future inflation and growth.
"If it wasn't for the trade war going on, the market would be up strongly" on the inflation data, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "Traders are focused on the trade war."
"It seems like the (U.S.) administration is being very aggressive and promises at least at this point to be in it for the longer term and the personalities look unlikely to back down at least in the near term," said Ghriskey.
On Wall Street, the S&P 500 fell 77.78 points, or 1.39%, to 5,521.52.
The Dow Jones Industrial Average was also nearing a correction confirmation, ending down 537.36 points, or 1.30%, at 40,813.57 on Thursday, roughly 9.4% below its most recent record closing high.
The Nasdaq Composite fell 345.44 points, or 1.96%, to 17,303.01. The tech-heavy index was down more than 14% from its recent record after confirming a correction on March 6.
Stock market corrections are fairly common, with the S&P 500 logging a correction 56 times since 1929, according to a Reuters analysis of data from Yardeni Research. Of these, only 22 morphed into bear markets, defined as a fall of 20% or more from most recent record highs, the data showed.
MSCI's gauge of stocks across the globe fell 9.33 points, or 1.12%, to 821.52 on Thursday, putting it more than 7% below its most recent record high after earlier hitting his lowest level since September.