US stocks plunge as oil heads higher

Stocks on Wall Streeet fell as an analyst downgrade weighed on the technology sector and oil prices continued to march higher.

At the close (10am NZ time), the Dow Jones Industrial Average was down 79.85 points, or 0.7%, to 12,090.63. Intel shed 1.6% after Wells Fargo cut its view of the semiconductor sector to "market weight" from "overweight" for the first time in more than two years.

However, Chevron rose 0.6% and Exxon Mobil gained 0.7% as crude-oil futures for April delivery climbed above $US105 a barrel on continued conflict in Libya.

The Nasdaq Compsite plunged 1.4% to 2745.63 as technology stocks lagged. The S&P 500 index shed 0.8% to 1310.13, with technology stocks leading the declines, while utilities and energy stocks gained.

Other markets: Europe, Asia down
European stocks fell amid intensified fighting in Libya and a rising oil price. Several investment banks raised their oil-price forecasts for 2011 and 2012, while analysts said the violence in North Africa should deter investors from increasing their exposure to equity markets.

Meanwhile, investors were reminded of Europe's lingering sovereign-debt problems when Moody's cut Greece's government-bond rating to B1 from Ba1 and warned it could be downgraded further given the risks to the country's stabilisation efforts.

The Stoxx Europe 600 Index is down 0.4% at 280.73. London's FTSE 100 Index dropped 0.3% to 5973.78, Frankfurt's DAX fell 0.2% to 7161.93 and Paris' CAC-40 Index was down 0.7% at 3990.41.

Asian markets mostly slumped as rising oil prices fuelled fears about inflation and economic growth. Japanese and Indian stocks faced added pressure from political setbacks to the ruling governments.

Chinese shares rose on the back of supportive economic policies, sending the benchmark Shanghai Composite Index up 1.8% to a fresh 2011 closing high.

Japan's Nikkei Stock Average tumbled 1.8% to 10,505.02, Korea's Kospi shed 1.2% to 1980.27, Australia's S&P/ASX 200 gave up 1.4% to 4797.88 and Hong Kong's Hang Seng Index shed 0.4% to 23,313.19.

Taiwan's Taiex fell 0.8% to 8713.79 and India's Sensex sank 1.4% to 18,222.67. Singapore's Straits Times rose 0.2% to 3066.52.

Commodities: Oil up
Oil futures advanced as violence continued near Libya's oil facilities and the prospect of a quick end to the conflict appeared remote.

Light, sweet crude for April delivery settled up $US1.02, or 1.0%, to $US105.44 a barrel in New York. Prices earlier rose to $US106.95 a barrel, their highest since September 26, 2008.

Brent crude on the ICE futures exchange eased 93USc, or 0.8%, to $US115.04 a barrel.

Gold futures rose further into record-breaking territory. The most actively traded contract, for April delivery, settled at $US1432.20 an ounce in New York. The contract reached a fresh intraday record of $US1445.00 an ounce.

The front month contract, for March delivery, was up 0.6%, or $US8.90, at $US1437.10.

Currencies: Oil rise hits dollar
The US dollar traded near a four-month low versus the euro, hurt by surging oil prices, rising inflation and prospects for a sustained period of loose US monetary policy.

Markets have recently favored currencies that offer higher yields, which have broadly underpinned the euro and pound. Meanwhile, instability in the Middle East has spurred nervous traders to buy Swiss francs and yen.

The euro touched and then backed off a new four-month high of $US1.4036 and was at $US1.3997 from $US1.3986 late on Friday.

Meanwhile, the dollar was at ¥82.20 compared with ¥82.32 late on Friday. The euro was at ¥115.12 from ¥115.13, while the pound traded at $US1.6225 from $US1.6271.