US stocks were having their worst day of 2010 on Wednesday as lending restrictions in China worried investors about the global economic recovery, while a conservative outlook from IBM weighed down technology shares. Official media and banking sources said Chinese authorities instructed some major banks to curb their lending over the rest of this month after an early burst of credit.

Concerns over Greek debt helped push the euro to a five-month low against the US dollar, weighing down commodity prices. The Dow Jones industrial average dropped 185.61 points, or 1.73 percent, to 10,539.82. The Standard & Poor's 500 Index fell 18.70 points, or 1.63 percent, to 1,131.53. The Nasdaq Composite Index lost 44.48 points, or 1.93 percent, to 2,275.92.

International Business Machines Corp fell 3.6 percent to $129.34 after an analyst said the company's earnings per share outlook for 2010 implies a slowdown in EPS growth compared to recent years. IBM reported stronger-than-expected quarterly profit after the bell on Tuesday.

Copyright Reuters, 2010