Stocks on Wall Street have failed to sustain the week’s strong opening by European markets, which were buoyed by higher commodity prices.
SunTrust Banks warned that lenders faced more credit losses and commercial real estate may falter through 2010, sending financial stocks down in the US and Canada.
Banks in the S&P 500 Index have fallen 1.7% while the main index closed 0.05% lower at 1025.57, after climbing as much as 0.9%.
The Dow Jones Industrial Average gained 3.32 points, or 0.03%, to 9509.28.
Ford Motor Co. declined 4.3% as the “cash for clunkers” programme for cars expired.
Canadian stocks erased an earlier gain as financial shares fell. Bank of Montreal dropped 2.8%, leading the S&P/TSX Composite Index’s decline. It closed 50 points, or 0.5%, lower at 10,781.18.
European stocks climbed for a third day, extending a 10-month high for the Dow Jones Stoxx 600 Index.
BHP Billiton and Rio Tinto gained more than 3.6% as base metals rallied. Sulzer increased 2.3% after the Swiss maker of textile machines reported profit that beat analysts’ estimates.
WPP surged 3.8% as Deutsche Bank recommended the shares before the world’s largest advertising company reports earnings this week.
The Stoxx 600 climbed 0.9% to 236.84, the highest close since Oct 7.
National benchmark indexes rose in all of the 18 western European markets.
UK stocks rose for a fifth day to a 10-month high. The benchmark FTSE 100 Index climbed 45.34, or 0.9%, to 4896.23, the highest level since October 3 last year.
German stocks advanced as the leaders of the world’s biggest central banks buttressed confidence in the global economic recovery and European industrial orders rose more than economists forecast in June.
The benchmark DAX Index added 1% to 5519.75, the highest close in almost 11 months,
France’s CAC 40 Index climbed 36.36, or 1%, to 3652.17, increasing for a third day to its highest level since November 5.
Commodities: Oil up, gold down
Crude oil rose to a 10-month high as stronger equities bolstered confidence in the economic recovery and the dollar weakened.
Oil climbed as much as 1.3% after Asian and European stocks advanced for a fifth day. The dollar traded near a two-week low.
Crude oil for October delivery increased 56USc, or 0.8%, to $US74.45 a barrel in New York. The contract touched $US74.81 a barrel, the highest level since October 21 on an intraday basis.
Gold declined the most in a week as the dollar climbed, eroding the metal’s appeal as an alternative investment.
Gold futures for December delivery slipped $US11, or 1.2%, to $US943.70 an ounce in New York. The drop was the biggest since August 17.
Bullion for immediate delivery fell $US10.72, or 1.1%, to $US943.13.
Currencies: Yen, pound fall
The yen traded near a one-week low against the euro as improving economic data encouraged investors to buy higher-yielding assets.
The yen traded at ¥135.20 versus the euro, compared with ¥135.21 on August 21. It earlier declined to ¥136.09, the weakest level since August 14.
The yen also depreciated 0.2% to ¥94.56 per dollar. The dollar traded at $US1.4299 per euro, compared with $US1.4326.
The pound declined to an 11-week low versus the euro amid speculation increased asset purchases by the Bank of England will depress yields on gilts (bonds).
The UK currency depreciated to 87.23p per euro after earlier trading at 87.27p, the weakest level since June 8. The pound declined to $US1.6427.
Canada’s dollar touched the strongest level in more than two weeks after a government report showed the nation’s retail sales increased in June five times as fast as economists forecast.
It appreciated 0.5% to $C1.0759 per US dollar from $C1.0812 on August 21.