Dow stocks return to red for year

Stocks on Wall Street have tumbled, sending the blue-chip Dow Jones Industrial Average back into negative territory for the year.

Fears continue that the euro-zone debt crisis is spreading while concerns are rising over the apparent failure of US deficit-cutting talks.

The super committee, charged with reducing the budget deficit by at least $US1.2 trillion over the next 10 years or else trigger automatic spending cuts, is facing almost certain collapse.

The Dow is down 302 points, or 2.6%, to 11,493 in afternoon trading, with all 30 blue-chip components in the red and putting the Dow down 0.8% for 2011.

The S&P 500 index is down 2.3% to 1188 and the Nasdaq Composite is down 2.3%, to 2512.

Financial stocks fell the hardest, followed by the industrial and technology sectors.

Other markets: Europe, Asia down
Europe markets were sharply lower and 10-year government bond yields climbed for Spain, Italy and France.

Moody's Investors Service said it may change its stable outlook on France's triple-A rating to negative in the coming months, and that German banks have sizeable exposures to troubled euro-zone countries.

Meanwhile, Germany's Bundesbank cut its 2012 growth forecast for the German economy to between 0.5% and 1% from the 1.8% growth predicted in June.

The Stoxx Europe 600 index closed down 3.2% at 224.76, the biggest percentage decline since November 1.

The UK's FTSE 100 closed 2.6% lower at 5222.60, Germany's DAX fell 3.3% to 5606.00 and France's CAC-40 closed down 3.4% at 2894.94.

Italy's FTSE MIB slumped 4.7% and Spain's IBEX 35 dropped 3.5% despite the change of government. In an expected result, the conservative opposition Popular Party, led by Mariano Rajoy, won the general election with an absolute majority in the lower house.

Asian shares lost further ground. Hong Kong's Hang Seng Index dropped 1.4% to 18,225.85, while China's Shanghai Composite Index traded down 0.1% at 2415.13.

Korea's Kospi fell 1% to 1820.03, while Japan's Nikkei Stock Average closed 0.3% lower at 8348.27 and Australia's S&P/ASX 200 index ended down 0.3% at 4163.0.

Commodities: Oil, gold down
Oil futures declined, as the US dollar strengthened against the euro.

Light, sweet crude for January delivery was down $US1.94, or 2%, to $US95.47 a barrel in New York. Brent crude was down $US1.22, or 1.1%, to $US106.34 a barrel.

Gold futures fell further as investors sold their holdings to raise cash.

The most actively traded gold contract, for December delivery, was down $US50.40, or 2.9%, at $US1674.70 an ounce in New York. Futures fell as low as $US1670.50, the lowest intraday price since October 25.

Currencies: Euro recovers most lost ground
The euro jumped back above $US1.35, nearly reversing all of the session's losses after a Greek official said eurozone officials would decide on a key tranche of the country's aid next week.

Investors appeared encouraged by the fixed date, which heralds some resolution for a market that remains wracked by uncertainty.

After falling as low as $US1.3430, the euro leapt above $US1.3510, leaving it marginally lower on the day. It also pared losses against the yen to trade around ¥103.97, fractionally higher from Friday's close.

The euro was at $US1.3510 from $US1.3524 late on Friday. The dollar was at ¥76.94, compared with ¥76.91, while the euro was at ¥103.94 compared with ¥103.90.

The UK pound bought $US1.5651 from $US1.5803, while the dollar fetched 0.9162 Swiss franc from 0.9168 franc.