Wall Street slips as bank capital rules tighten

Stocks on Wall Street extended last week’s losses as banks sagged in expectation of tighter capital standards.

The Wall Street Journal reported that the US Federal Reserve is set to embrace Basle-based banking supervision rules that banks hold extra capital.

JP Morgan Chase lost 4.4% and Bank of America shed 4.1% to lead the blue-chip Dow's decliners. Caterpillar rose 0.7% after reporting a 30% jump in sales of construction and mining machinery in the three months to the end of November.

The Dow Jones Industrial Average was down 100.13 points, or 0.8%, to 11,766.26 at the close (10am NZ time). The S&P 500 index shed 1.2% to 1205.35 and the Nasdaq Composite lost 1.3% to 2523.14.

Other markets: Europe mixed, Asia down
European markets were mixed with the Stoxx 600 finishing 0.2% higher at 233.8.

The German DAX 30 index lost 0.54% to 5670.7, while France's CAC 40 rose 0.6% to 2974.11 and the UK’s FTSE 100 index fell 0.41% to 5365.

Asian stock markets dropped sharply as news of North Korean leader Kim Jong Il's death heightened fears of instability on the Korean Peninsula.

The Seoul share market's Kospi Composite briefly fell 4.9% to its lowest level since mid-October and closed down 3.4% at a four-week low.

Japan's Nikkei Stock Average finished down 1.3% and Australia's S&P/ASX 200 dropped 2.4% – both tapping three-week lows. Hong Kong's Hang Seng Index fell 1.2% and China Shanghai Composite closed down 0.3%.

Commodities: Oil, gold down
Crude-oil futures traded higher but remained below $US94 a barrel. The January contract was up 41USc, or 0.4%, to $US93.94 in New York.

Prices have fallen nearly 7% over the past three trading sessions.

Gold futures logged their fourth-consecutive finish below $US1600 an ounce as strength in the US dollar helped dampen demand. The February contract declined $US1.20, or 0.1%, to $US1596.70 an ounce in New York.

Currencies: US dollar rises
The US dollar got ahead of its major rivals before falling back to last week’s levels as investors measured the impact of North Korean leader Kim Jong Il’s death.

The South Korean won reacted sharply to the news, with the dollar jumping to 1176.35 won versus 1158.50 won before the news.

The euro traded at $US1.3023, versus $US1.3030 late on Friday, while the UK pound changed hands at $US1.5535, up from $US1.5507.

Against the Japanese yen, the dollar traded at ¥77.93, edging up from ¥77.82 on Friday.