Stocks on Wall Street had a shaky start to the week, mostly failing to retain last Friday’s gains as the European banking system continues to roil investors.
Those concerns paved the way for a solid gain in the US dollar against the euro and other denominations.
On other markets, investors showed signs of taking on some risk in commodities and technology shares, but these were routed in a late session selloff.
The Dow Jones Industrial Average closed 126.82 points, or 1.2%, lower at 10,066.57. The top decliners were spread across several sectors, including J.P. Morgan Chase, off 2.3%; Kraft Foods, off 2.1%; Boeing, off 1.7%; General Electric, off 1.6%: and AT&T, off 1.3%.
The Nasdaq Composite Index, which managed to stay in positive territory for most of the session, swung to a 0.7% loss to finish at 1073.65. The broader S&P 500 posted losses in all sectors, closing 1.3% down at 2213.55.
Other markets: Europe, Asia up
European markets edged higher in a choppy session.
Spanish banks led the declines among European financial stocks, after Spain's central bank moved to take over church-controlled savings bank CajaSur.
Spanish bank Banco Bilbao Vizcaya Argentaria fell 2% and Banco Santander lost 1.2%.
However, overall declines in Europe were slight, while several markets were closed, observing the traditional Whit Monday or Pentecost holiday.
The pan European Stoxx 600 index gained 0.4% at 238.02. The UK's FTSE 100 index rose 0.1% at 5069.61, Germany's DAX index finished down 0.4% at 5805.68 and France's CAC-40 index closed little changed at 3430.93.
In Asia, Chinese stocks surged, led by gains in property developers on hopes that Beijing will ease off on tightening measures to curb the property market.
Shares in Japan ended mostly lower with investors still cautious about debt troubles in the euro zone.
China's Shanghai Composite Index jumped 3.5% to 2673.42, while Japan's Nikkei Stock Average fell 0.3% to 9758.40, its lowest close since early December.
Most other regional markets climbed, with Hong Kong's Hang Seng Index up 0.6% to 19667.76, Australia's S&P/ASX 200 rising 2.1% to 4395.39, Korea's Kospi ahead 0.3% to 1604.93, and Taiwan's Taiex up 1.2% to 7322.73.
Commodities: Oil, gold up
Crude futures rose slightly, as the oil market stabilised following weeks of steep decline.
However, concerns about Europe's economic health looked to be keeping investors out of equities, often a leading indicator for commodities markets.
Light, sweet crude for July delivery traded 32USc higher at $US70.36 a barrel in New York. Brent crude on the ICE futures exchange traded 25 cents lower at $71.43 a barrel.
Gold futures climbed as investors used last week's price retreat as an opportunity to buy.
Gold for June delivery in New York rose $US17.60, or 1.5%, to $US1193.70 an ounce.
Currencies: Euro down, dollar up
The euro fell after worries again flared over euro-zone economies after the Spanish bank rescue.
The euro strengthened at the end of last week as investors unwound trades, but are again betting on its further decline. It was at $US1.2403 from $US1.2574 late on Friday.
The dollar was at ¥90.46 from ¥89.99, while the euro was trading at ¥112.18 from ¥112.80.
The UK pound was at $US1.4438 from $US1.4484.
Tue, 25 May 2010