Wall Street gives thumbs down to euro summit

Stocks on Wall Street dropped sharply as credit ratings firms gave the thumbs down to last week's European summit.

A profit warning from Intel also weighed on blue chip stocks. It plunged 5.4% after warning that fourth-quarter revenue would fall about $US1 billion short of its previous guidance.

Financial stocks were the weakest sector in the S&P 500 while Bank of America and JP Morgan Chase were two of the Dow's biggest decliners, shedding 5.1% and 4.1%, respectively.

Fitch Ratings said the summit did “little to ease pressure" on the sovereign-debt crisis and that a comprehensive solution was “not on offer." It also predicted a "significant" economic downturn in Europe in the short term.

Earlier, Moody's Investors Service said it would review European countries' sovereign ratings.

At the close (10am NZ time), the Dow Jones Industrial Average had lifted off its lows to be down 162.87 points, or 1.3%, to 12,021.39.

The S&P 500 index was down 1,5% at 1236.47, while the technology-oriented Nasdaq Composite was down 1.3% to 2612.26.

Other markets: Europe down, Asia mixed
Major European stock indexes finished sharply lower.

The Stoxx Europe 600 index dropped 1.9%, to 236.05, following a 1.2% rise on Friday, the biggest percentage gain since November 30.

The UK's FTSE 100 declined 1.8%, to 5427.86. Germany's DAX fell 3.4%, to 5785.43 and France's CAC-40 dropped 2.6%, at 3089.59.

Most Asian markets advanced, with exporters and commodity-linked stocks among the notable gainers.

Japan's Nikkei Stock Average climbed 1.4% to finish at 8653.82, Australia's S&P/ASX 200 index rose 1.2% to 4252.80 and Korea's Kospi added 1.3% to 1899.76.

China's Shanghai Composite lost 1% to 2291.54 on worries about the nation's slowing economy and weakening exports to Europe. That weighed on Chinese shares listed i

In Hong Kong, the Hang Seng Index was 0.1% lower at 18,575.66. India's Sensex fell 2.1% to 15870.35.

Commodities: Oil, gold down
Crude-oil futures fell nearly 2% as the US dollar rallied. The January contract declined $US1.74, or 1.8%, to trade at $US97.67 a barrel in New York.

Gold futures slumped below $US1700 for the first time in two weeks.

The most actively traded contract, for February delivery, was down $US46.90, or 2.7%, to $US1669.90 an ounce in New York. The front-month contract for December delivery fell $US44.90, or 2.6%, to $US1667.90 an ounce.

Currencies: US dollar surges
The US dollar gained against major currencies, while the euro fell to its lowest level in two weeks.

The euro fell to $US1.3216, compared with $US1.3370 in late on Friday.

The dollar also gained against the Japanese yen. The dollar bought ¥77.83, compared with ¥77.50.

The UK pound slipped to $US1.5623, compared with $US1.5659.