US stocks drop as oil goes higher

Stocks on Wall Street are down for a second straight session as investors dump shares of Hewlett-Packard, while higher oil prices boosted energy stocks.

Crude futures in Europe topped $US110 a barrel as further production was shut down in Libya.

At the close (10am NZ time), the Dow Jones Industrial Average fell 107.01 points, or 0.9%, to 12,105.78, dragged down by a 9.6% tumble at HP. Its plunge came after posting a 16% quarterly profit increase but surprised with weak revenue growth, dragged down by lower personal-computer sales to consumers.

Other the big Dow losers were Caterpillar, down 2%, and 3M, down 1.9%, both indicators for the global economy. Energy stocks led the broader indexes, with Chevron adding 3.2% and Exxon Mobil, up 2.1% and the strongest performer on the Dow so far this year.

The S&P 500 index dropped 0.6%, to 1307.40 while the tech-heavy Nasdaq Composite plunged 1.2% to 2722.99.

Other markets: Europe, Asia down
European stock markets closed lower as investors continued to fret over tensions in the Middle East and North Africa, although banking stocks offered support after some healthy corporate news from the sector.

The Stoxx Europe 600 index closed down 1.1% at 282.38. The UK's FTSE 100 fell 1.2% to 5923.53. Germany's DAX was off 1.7% at 7194.60 and France's CAC-40 closed 0.9% lower at 4013.12.

In Asia, Hong Kong shares declined as some property developers ended lower after a roller-coaster ride following government proposals to increase land supply.

Japanese stocks were weighed down by the yen's strength against the US dollar. The Nikkei Stock Average fell 0.8% to 10,579.10
Against the trend, the Shanghai Composite gained 0.2% to 2862.63. Hong Kong's Hang Seng index declined 0.4% to 22906.90 and Australia's S&P/ASX 200 shed 0.2% to 4845.87.

Korea's Kospi dropped 0.4% to 1961.63, Taiwan's Taiex gave up 1.7% to 8528.94, and India's Sensex fell 0.6% to 18178.33.

Commodities: Oil, gold up
Oil futures surged, with the European benchmark pushing past $US110 a barrel, as continued upheaval in Libya fanned worries about global crude supplies.

Light, sweet crude for April delivery jumped $US2.49, or 2.6%, to $US97.71 a barrel in New York, the contract's highest price since October 2008. The front-month contract got a $US3.50-a-barrel boost overnight with the expiration of the cheaper March contract.

Brent crude on the ICE futures exchange climbed $US4.34, or 4.1%, to $US110.12 a barrel.

Gold futures prices edged higher as traders focused on a weaker dollar and unrest in the Middle East.

The most actively traded contract, for April delivery, was up 0.3%, or $US3.70, at $US1404.80 an ounce in New York. The thinly traded February-delivery contract was up 0.2%, or $US3.30, at $US1403.80 an ounce.

Currencies: Dollar down, yen up
The US dollar fell to multi-week lows against the euro and the Swiss franc as traders continued to take their cues from European Central Bank policy and Middle East turmoil.

The euro rose to its highest levels since February 3 against the dollar, which also fell to its lowest level against the Swiss franc since it hit a record low of 0.9301 set on December 31.

The dollar was at ¥82.40 from ¥82.77 late on Tuesday, while the euro was at $US1.3759 from $US1.3654. The pound traded at $US1.6222 from $US1.6130 after the latest Bank of England minutes showed the central bank moving closer to raising interest rates.

The dollar was at 0.9318 Swiss franc from 0.9386 franc.