Wall St posts biggest weekly decline in year

Stocks on Wall Street posted the biggest weekly decline in a year as the stalemated debt talks continued into the weekend.

The Dow Jones Industrial Average closed down 96.87 points, or 0.79%, to 12,143.24, in a volatile session that extended the index's losing streak to six straight sessions. All but two of the 30 Dow components finished in the red.

The blue-chip index tumbled 537.92 points for the week, its biggest point drop since the week ended May 7, 2010. It finished the month of June down 2.2%, its third consecutive monthly decline.

Economic news added to the uncertainty. GDP increased at a paltry 1.3% annual rate in the second quarter, the US Commerce Department said. First-quarter revisions – down to 0.4% from 1.9% – reflected an economy at a near-standstill early in the year.

In the debt negotiations, Congress approved a bill pushed by Speaker John Boehner to raise the government's borrowing limit but short while later, the Democratic-led Senate voted to block the measure.

Negotiations continued over the weekend on a potential compromise that could win bipartisan support.

Other markets: Europe, Asia fall
European stock markets fell on a mix of disappointing US economic data and fears of a possible default.

The Stoxx Europe 600 index declined 0.7% to close at 265.25. The index lost 2.8% over the month, its third consecutive monthly loss.

In France, the CAC 40 index dropped 1.1% to at 3672.77, its second-lowest close of the year. For July, the index slumped 7.8%, its biggest monthly decline since May 2010.

The UK's FTSE 100 index dropped 1% to 5815.19. It dropped 2.1% in July, its worst monthly showing since November. In Germany, the DAX 30 index fell 0.4% to 7158.77.

Asian stock markets ended lower with Japanese stocks also hit by a set of weak earnings reports and profit outlooks.

The Nikkei Stock Average ended the day 0.7% lower at 9833.03, Australia's S&P/ASX 200 index declined 0.9% to 4424.6 and Korea's Kospi gave up 1.1% to 2133.21.

Taiwan's Taiex lost 1.4% to 8644.18, Hong Kong's Hang Seng Index fell 0.6% to 22,440.25 and China's Shanghai Composite fell 0.3% to 2701.73.

Commodities: Oil falls, gold hits new high
Light, sweet crude-oil futures tumbled amid concerns about slower-than-expected U.S. economic growth and the debt-ceiling standoff.

Some market participants see stronger odds of near-term US crude-oil futures falling into the $US80s than again climbing above $US100 a barrel.

The September delivery contract fell $US1.74, or 1.8%, to $US95.70 a barrel, the weakest price since July 18. The contract briefly dropped to a session low of $94.95 a barrel.

Gold broke records, jumping to an intraday high of $US1637.50 an ounce.

The most actively traded gold contract, for December delivery, settled at a record $US1631.20, up $US15, or 0.9% in New York. The contract touched an intraday record of $US1637.50.

August-delivery gold rose $US14.90, or 0.9%, to settle at a record $US1628.30 an ounce. It earlier touched an intraday record of $US1634.90.

Currencies: US dollar under pressure
Weak US data and the crisis hit the dollar, pushing it to a new record low against the Swiss franc.

The euro was at $US1.4373 from $US1.4331 late on Thursday. The dollar traded at ¥76.99 from ¥77.72, while the euro was at ¥110.66 from ¥111.33.

The UK pound fetched $US1.6415 from $US1.6373. The dollar bought 0.7871 Swiss franc from 0.8010 franc.