Wall Street drops on poor earnings outlook, commodities fall

Stocks on Wall Street fell sharply in a sell-off triggered by falling prices for crude oil and other risky commodities.

Global stock markets finished broadly lower, as German economic sentiment fell for a second straight month and fears spread across Asia after Japan declared its nuclear crisis at the level of the Chernobyl disaster in 1986.

US energy stocks fell sharply as crude oil tumbled 3.3% to just over $US106 a barrel after finishing the previous week above $US112.79 a barrel, a two-year high.

A lacklustre start to the US first quarter corporate reporting season added to concerns.

The Dow Jones Industrial Average fell 117.76 points, or 1%, to 12,263.35 at the close (8am NZT), while the S&P 500 index was off 0.8% at 1314.21 and the Nasdaq Composite was also down 0.8% at 2744.79.

Exxon Mobil dropped 2.9%, while Chevron slid 3.6%. Consumer stocks mainly rose, with Wal-Mart Stores gaining 1.3% on hopes that lower fuel costs will boost sales.

Alcoa shares slumped 6.8% to lead the Dow losers after reporting earnings that topped expectations but revenue that fell short of forecasts. The company also warned of higher energy and raw material costs.

Other markets: Europe, Asia down
Resource stocks led European markets lower amid falling commodity prices. The Stoxx Europe 600 index closed down 1.7% to 276.24, pulled down by a 5% slump for miners Kazakhmys and Antofagasta in London and a 2.5% drop for French oil major Total.

German think tank ZEW said its closely watched economic expectations index decreased for the second straight month, signalling a less positive outlook for Europe’s strongest economy.

The UK's FTSE 100 index lost 1.5% to 5964.47, France's CAC-40 index shed 1.5% to 3976.60 and Germany's DAX lost 1.4% to 7102.91.

Asian shares fell on Japan's hiking of its nuclear crisis and by the IMF’s prediction that the region’s economic growth is likely to slow this year.

Japan's Nikkei Stock Average skidded 1.7% to 9555.26, Australia's S&P/ASX 200 dropped 1.5% to 4898.69 and Korea's Kospi slid 1.6% to 2089.40.

Hong Kong's Hang Seng Index shed 1.3% to 23976.37, but China's Shanghai Composite slipped less than 0.1% to 3021.37. Indian markets were closed for a public holiday.

Commodities: Oil slumps on demand fears
Crude-oil futures slumped as traders worried that high prices in recent weeks are beginning to cut into fuel demand.

Light, sweet crude for May delivery settled $3.67, or 3.3%, lower at $106.25 a barrel in New York. Brent crude on the ICE futures exchange settled $3.06, or 2.6%, lower at $120.98 a barrel.

Gold futures settled 1% lower as investors reduced their appetite for commodities overall and pushed inflation worries to the back burner at least for the day.

Gold for June delivery declined $US14.50, or 1%, to $US1453.60 an ounce in New York.

Currencies: Euro drifts back from highs
The dollar pared its losses after hitting its lowest levels in more than a year against a basket of major currencies.

The euro drifted back below $US1.4520, its highest level since January 2010, to trade at $US1.4460 from $US1.4428 late on Monday.

The dollar was at ¥83.79 from ¥84.62, and the euro was at ¥121.16 from ¥122.10. The UK pound was at $US1.6255 from $US1.6347.