US stocks plunge at close

Stocks on Wall Street fell sharply at the end of the session after earlier showing gains as investors weighed a cautious assessment of the economy from the Federal Reserve against encouraging remarks from global shipping giant FedEx.

The Fed downgraded its assessment of the US economy's performance but gave no indication it intended to take new steps to boost growth and jobs.

FedEx shares rose 3.2% after its fiscal fourth-quarter earnings and revenue topped expectations. It also delivered a promising outlook, saying it expected a continued "moderate" pace of recovery and industrial-sector expansion. Rival UPS rose 0.9%.

The market had started the day in negative territory, clambering to a modest gain before falling again after Fed chairman Ben Bernanke hosted an afternoon news conference.

The Dow Jones Industrial Average finished down 80.34 points, or 0.7%, at 12,109.67 (8am NZ time) , while the S&P 500 index was down 0.6% to 1287.14. The Nasdaq Composite lost 0.7% to 2669.19.

Other markets: Europe falls, Asia rises
European stocks fell as investors looked beyond a confidence-vote victory by Greece's government to fresh evidence that the European consumer environment is showing signs of extreme stress.

The Stoxx Europe 600 index fell 0.6% to 268.07, the 11th decline in the past 16 trading days.

In London, the FTSE 100 fell 2.32 points to 5772.99, in Frankfurt, the DAX fell 0.1% to 7278.19 and in Paris, the CAC-40 fell 0.2% to 3871.37.

In Asia, Japanese stocks rose sharply on Greece optimism while interest-rate worries dragged back bourses in Hong Kong and China.

The Nikkei Stock Average jumped 169.77 points, or 1.8%, to 9629.43. It was the sharpest percentage increase since May 31 and pushed the index to the highest close since June 1.

The Shanghai Composite Index inched up 0.1% to 2649.32 in choppy trading; Hong Kong's Hang Seng Index rose less than 0.1% to 21,859.97.

In Seoul, the Kospi rose 0.8% to 2063.90, in Sydney, the S&P/ASX 200 index rose 0.5% to 4532.6 and in Mumbai, the Sensex fell 0.1% to 17,550.63, the fifth decline in the last six sessions.

Commodities: Oil firms, gold jumps
Oil futures held their gains despite the Fed's downbeat assessment of the US economy.

Light, sweet crude for August delivery rose 82USc, or 0.9%, to $US94.99 a barrel in New York. Front-month prices got a 77USc boost overnight with the expiration of the cheaper July contract.

Brent crude on the ICE futures exchange was up $US2.60, or 2.4%, at $US113.55 a barrel.

Gold futures rose 1% immediately after the Fed’s announcement, with August-delivery contracts briefly touching $US1559.00 an ounce, but pared these gains just as quickly to trade at $US1554.60, up $US8.20 or 0.5%.

June delivery gold was at $US1554.40, up $US8.40 or 0.5%.

Currencies: US dollar rises
The US dollar was higher against the euro and little changed against the yen as it strengthened against both currencies after the Fed's latest policy statement.

Earlier, the dollar weakened against both the euro and the yen, with the euro hitting a session high at $US1.4442.

The euro was at $US1.4399 from $US1.4411 late on Tuesday. The dollar was at ¥80.17 from ¥80.20, while the euro was at ¥115.44 from ¥115.59.

The UK pound bought $US1.6118 from $US1.6245, and the dollar was at 0.8369 Swiss franc from 0.8405 franc.