Euro crash drags world stocks down

Stocks on Wall Street dropped for a third day as the euro fell below $US1.30 and Europe's woes continued to hold sway over global markets.

The euro is trading at $1.2990, an 11-month low, and has fallen 3.1% this week.

Energy stocks lead the declines on Wall Street as oil and commodity prices fell broadly.

Export bellwether Caterpillar dropped 4.3%, while Chevron gave up 2.9% and Exxon Mobil fell 1.6%.

Technology stocks were also weak, with Hewlett-Packard and Cisco Systems dropping 1.8% and 3.1% respectively..

The Dow Jones Industrial Average was down 132.07 points, or 1.1%, to 11,874 at the close (10am NZ time).

The S&P 500 index was down 1.1% to 1211.80 and the Nasdaq Composite shed 1.5% to 2539.31.

Other markets: Europe, Asia down
European markets finished at the day's lows as sentiment toward the euro soured and German Chancellor Angela Merkel confirmed she opposed raising the lending limit for the eurozone bailout fund.

The Stoxx Europe 600 lost 2.1% to 232.44, with France's CAC 40 index slumping 3.3% to 2976.17.

The German DAX 30 index fell 1.7% to 5675.14 and the resources-heavy FTSE 100 index fell 2.3% to 5366.80.

Asian markets ended mostly lower after the US Federal Reserve signalled it would take no action to boost the US economy.

Japan's Nikkei Stock Average finished 0.4% lower at 8519.13 and Australia's S&P/ASX 200 dropped 0.1% to 4190.5.

Korea's Kospi shed 0.3% to 1857.75 and China's Shanghai Composite ended 0.9% lower at 2228.53, marking its fifth straight session of losses.

Hong Kong’s Hang Seng Index dropped 0.5% to 18,354.43, while Taiwan's Taiex blazed its own trail, rising 0.4% to 6922.57.

Commodities: Oil drops, gold below $US1600
Crude-oil futures fell below $US96 a barrel after Opec members agreed to maintain their total production level and warned about lower economic growth next year.

Crude-oil futures for January delivery dropped $US4.55, or 4.5%, to $US95.59 a barrel in New York after tapping a low of $95.39.

Gold broke below $US1600 an ounce for the first time since early October.

The February contract was down $US94.90, or 5.7%, at $US1568.20 an ounce in New York, the first time the most-active contract traded below $US1600 since October 5.

Currencies: Euro falls to 11-month low
The euro fell below $US1.30 for the first time since January 12 as concern mounted that last week's summit of European Union leaders didn’t go far enough to fix the currency.

The euro was at $US1.2993 from $US1.3037 late on Tuesday. It also traded at £0.8399, compared with £0.8416 and at ¥101.44 from ¥101.64.

The US dollar was at ¥78.07 from ¥78, and at 0.9518 Swiss franc from 0.9457 franc.

The UK pound fell to its lowest level against the dollar since October 6. The pound dropped to $US1.5410 before rising to $US1.5467 compared with $US1.5480 late on Tuesday.