Debt impasse pushes US stocks down

Stocks on Wall Street fell for fourth straight session amid signs of economic softness and a deepening impasse on the US debt crisis.

Most other world markets also fell, while gold reach a new trading high.

At the close (8am NZ time), the Dow Jones Industrial Average plunged 198.75 points, or 1.6%, to 12,302.55, the biggest drop since June 1. The Dow has shed more than 400 points over the course of its losing streak.

The S&P 500 index was down 2.0% to 1304.89 and the Nasdaq Composite lost 2.7%, to 2764.79.

The declines were led by technology and industrial stocks, which were the among weakest stocks in the S&P 500 for a second consecutive session. The biggest drops were Caterpillar, down 3.7%, and Cisco, also down 3.7%.

Adding to the gloom was news on durable-goods orders, which suggested continued sluggishness in manufacturing. Orders for goods designed to last at least three years fell 2.1% in June; economists had expected a 0.4% increase.

Other markets: Europe drops, Asia mixed
European stocks fell sharply. The Stoxx Europe 600 index closed down 1.1% at 267.05.

The UK's FTSE 100 index dropped 1.2% to 5856.58, France's CAC-40 index ended 1.4% lower at 3734.07 and Germany's DAX fell 1.3% to 7252.68.

Asian stock markets ended mixed. Japan's Nikkei Stock Average closed the session down 0.5% at 10,047.19 as a strong yen pressured exporters.

Australia's S&P/ASX 200 finished 0.8% lower at 4537.4 after inflation exceeded expectations and raised the possibility of another interest-rate increase.

Hong Kong's Hang Seng Index managed to breach positive territory for part of the session, but weakness in shares of export-focused companies dragged the benchmark to a 0.1% loss at 22,541.69.

India's Sensex fell 0.5% to 18,432.25. Among the region's winners, the Shanghai Composite index ended 0.8% higher at 2723.49 and Korea's Kospi recovered from early losses to rise 0.3% to 2174.31.

Commodities: Oil down, gold drops from new high
Oil futures pushed lower after the US Department of Energy reported an increase in oil inventories and as the first deliveries from the Strategic Petroleum Reserve hit the market.

Light, sweet crude for September delivery was down $US1.42, or 1.4%, to $US98.17 a barrel in New York.

Oil inventories rose 2.3 million barrels last week, bucking expectations for a decline of 1.4 million barrels.

Gold futures slumped to a two-day low. The contract for July delivery, which expired, lost $US1.60, or 0.1%, to settle at $US1.615 an ounce in New York.

August futures, the most actively traded contract, fell $US1.70, or 0.1%, to settle at $US1,615.10. The contract set an intraday record of $US1,628.80 earlier in the day.

Currencies: US dollar, euro drop
Investors increasingly expect the US to lose its triple-A credit rating over the debt impasse. But the greenback gained against the euro in a reminder that the euro zone's debt woes are far from over.

The dollar fell to ¥77.78, its lowest since the post-World War II low of ¥76.25 reached in March. The dollar was at ¥77.93 compared with ¥77.89 late on Tuesday.

The euro, though, fell to $US1.4468 from $US1.4511 late on Tuesday.