Stocks struggle for direction on Wall St, then drop sharply

Stocks on Wall Street dropped sharply  in the final hour as commodity price falls added to European debt worries.

Earlier, stocks rose and fell as the market struggled to find direction amid continued uncertainty in the financial situation across the Atlantic.

In latest developments, Finland voted to approve changes to the euro-zone bailout fund, after leaders raised concerns earlier this month that they would demand collateral as a precondition for participation.

Germany votes on the changes later today (NZ time). The changes need to be approved by all 17 euro-zone members to take effect.

Stocks in Europe finished near their lows of the day. In commodity markets, crude oil fell 3.8% to below $US81.21 a barrel and gold futures slipped 2.1% to $US1616.30 an ounce.

At Wall Street's close (9am NZ time), the Dow Jones Industrial Average fell 179.79 points, or 1.6%, to 11,010.90 after starting the session 175 points up. The S&P 500 index slid 2.1% to 1151.06, while the Nasdaq Composite plunged 2.8% to 2491.58.

Alcoa fell 4.9% to lead the Dow decliners as commodities faltered, particularly copper. Amazon.com climbed 2.5% after unveiling its Kindle Fire tablet, which is to compete with Apple's iPad.

In US economic headlines, durable-goods orders during August slipped 0.1%, the second drop in three months as manufacturers struggled with the tough economy.

Other markets: Europe down, Asia mixed
European stocks ended lower as hope on the debt crisis gave way to nervousness. Losses occurred across the board as investors awaited the next developments.

The Stoxx Europe 600 index closed down 1.1% at 227.39. The UK's FTSE 100 index fell 1.4% to 5217.63, France's CAC-40 index ended down 0.9% at 2995.62 and Germany's DAX dropped 0.9% to 5578.42.

Japanese and Australian stock markets advanced but Chinese and Korean markets traded lower.

The Nikkei Stock Average rose 0.1% to 8615.65 and Australia's S&P/ASX 200 index gained 0.9% to 4039.50.

However, Korea's Kospi fell 0.7% to 1723.09, while the Shanghai Composite Index fell 1% to 2392.06, its lowest close since July 2010.

In Hong Kong, the Hang Seng Index lost 0.7% to 18,011.06, and India's Sensex fell 0.5% to 16,446.02.