NEW YORK (Reuters) - Shares on major exchanges fell for a sixth straight day on Thursday and crude oil prices touched multi-year lows as investors fretted over the state of China’s economy and its ability to stabilize its stock market.

In a move that deepened concerns over China’s economic health, the People’s Bank of China set the yuan midpoint rate lower for an eighth consecutive day. The 0.5 percent decline was the biggest between daily fixings since August.

China suspended a circuit breaker implemented at the start of 2016 that stopped trading for the day when the benchmark index fell 7 percent, a halt already triggered twice this week. Analysts and investors said the mechanism, put in place to avoid market volatility, may have backfired.

“People see the weakness in China and in the overall equity market and think there’s going to be an impact on corporations here in the United States,” said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.

Rounding out its worst four-day start to a year in more than a century, the Dow Jones industrial average .DJI fell 392.41 points, or 2.32 percent, to 16,514.1.

The S&P 500 .SPX lost 47.17 points, or 2.37 percent, to 1,943.09 and the Nasdaq Composite .IXIC dropped 146.34 points, or 3.03 percent, to 4,689.43.

A gauge of major stock markets globally .MIWD00000PUS fell 2.2 percent and Nikkei futures NKc1 were down 2.6 percent.

Slideshow ( 2 images )

CURRENCY WAR BREWING

Investors fear China’s economy is even weaker than had been imagined, with Beijing, in a bid to help exporters, allowing the yuan’s depreciation to accelerate. The move risks triggering a cycle of competitive devaluation, said Mexican Finance Minister Luis Videgaray.

The U.S. dollar tumbled 0.9 percent against a basket of currencies .DXY, losing 1.4 percent to $1.0929 versus the euro EUR= and 0.7 percent to the yen JPY= at 117.63.

Brent crude cut a loss of more than 6 percent to trade down 1.6 percent, while U.S. crude CLc1, down as much as 5.5 percent earlier, was down 2.3 percent.

The benchmark U.S. Treasury yield US10YT=RR touched its lowest since late October. U.S. 10-year Treasury notes were last up 8/32 in price to yield 2.1491 percent, from 2.177 percent late on Wednesday.

Gold touched $1,110 an ounce for the first time in nine weeks as the dollar fell and investors rushed into perceived havens. Spot gold XAU= rose 1.35 percent to $1,109.10 an ounce. Its 4.6 percent gain up to Thursday was the best four-day run for gold in a year.

Copper prices CMCU3 touched a low not seen since May 2009.