US stocks have fallen in the wake of a sell-off in emerging-market assets, hurt by growth concerns in China and rising expectations that the Federal Reserve will slow its market-friendly stimulus measures further.

With many market participants expecting the the US central bank next week to reduce its stimulus by another $10bn a month, investors will look to less risky assets such as US bonds, expecting interest rates will begin to rise.

The Fed's policy-makers will conclude a two-day meeting on Wednesday.

A rout in emerging-market assets spread to developed countries in Europe on worries over Fed policy, slowing growth in China and political problems in Turkey, Argentina and Ukraine.

Worries over China's growth emerged after a disappointing manufacturing number spurred the S&P 500 to a 0.9 percent fall on Thursday.

The Turkish lira hit a fresh record low and the South African rand a new five-year low against the dollar.

US-listed shares of Banco Bilbao Vizcaya Argentaria, SA dropped 5.3 percent to $12.01.

Shares of the Spanish bank with heavy exposure to Latin America fell a day after Argentina's peso suffered its steepest daily decline in 12 years, prompting Argentina's government to loosen strict foreign exchange controls.

Benchmark 10-year Treasuries notes were up 11/32 in price with a yield of 2.735 percent.

Argentina's government said on Friday it would loosen strict foreign exchange controls, after it abandoned its long-standing policy of intervening to support the peso currency.

That resulted in the currency's steepest plunge since the 2002 financial crisis.

The Dow Jones industrial average fell 124.39 points or 0.77 percent, to 16,072.96, the S&P 500 lost 15.26 points or 0.83 percent, to 1,813.2 and the Nasdaq Composite dropped 38.212 points or 0.91 percent, to 4,180.663.

The S&P 500 is down 1.3 percent for the week.

The benchmark index fell below its 50-day moving average for the first time since December 18, a technical support level that could indicate more selling pressure if convincingly pierced.

Source: Agencies