Wall Street up after late rally

UPDATED: US stocks staged a late rally, to close higher across the board, on reports that European officials were working on a plan to prop up the region's struggling banks and as the market digested news that the Fed may provide further stimulus to the ailing US economy.

After initially declining to be moved by Federal Reserve chairman Ben Bernanke's comments, the final hour of trade saw markets recoup earlier losses and move into positive territory.

At the close (9am NZ time), the Dow Jones Industrial Average was up 153.41 points, or 1.4%, to 10,808.71, after gaining more 400 points in the final hour of trade.

The S&P 500 Index finished up 2.2% to 1123.95 after rising nearly 4% near the close. The Nasdaq Composite Index rose 2.5%, to 2393.49.

Stocks on Wall Street have fallen steeply for a third day despite Federal Reserve chairman Ben Bernanke saying the central bank was ready to do more to boost the economy.

His comments stemmed an early session slide to a 251-point drop but late in the afternoon the slide resumed. Speaking before a Congressional panel, Mr Bernanke said that fostering healthy growth is a "shared responsibility of all economic policy makers, in close cooperation with the private sector."

He didn't rule out a third round of quantitative easing but he acknowledged there weren't immediate plans to implement another bond-buying programme.

Oil futures dropped to their lowest level in more than a year at about $US75 while gold fell further.

Just before the close (9am NZ time), the Dow Jones Industrial Average was down 174 points, or 1.6%, to 10,481. The Dow plunged 498.68 points over the previous two trading days and closed on Monday at its lowest level in more than a year.

The S&P 500 index is down 1.3% to 1084 and the Nasdaq Composite has reversed earlier gains to be down 1.0% to 2312.

Other markets: Europe, Asia add to losses
European stocks continued to post sharp losses as the Greek debt crisis remained unresolved.

The Stoxx Europe 600 index fell 2.8% to close at 217.46, adding to a loss of 1.1% in the previous session.

The German DAX 30 index ended 3% lower to settle at 5216.71, while the French CAC 40 index dropped 2.6% to 2850.55.

In London, the FTSE 100 index fell 2.6% to end at 4944.44.

Asian shares ended lower. Japan's Nikkei Stock Average shed 1.1% to 8456.12, while Korea's Kospi ended down 3.6% at 1706.19 after falling as much as 6.3% intraday after a holiday on Monday.

Hong Kong's Hang Seng Index ended 3.4% lower at 16,250.27 and Australia's S&P/ASX 200 index shed 0.6% to 3872.10.

India's Sensex was down 1.8% to 15,864.86. Chinese markets remained closed for a weeklong holiday.

Commodities: Oil, gold down
Light, sweet crude for November delivery fell as much as 3.4% to $US74.95 a barrel in New York, the lowest level since September 24, 2010, before recovering to $US77.09.

Brent crude traded below the $US100-a-barrel level before recovering to be down 63USc, or 0.6%, at $101.08.

Gold fell further as Mr Bernanke played down the threat of inflation though he didn’t rule out a further round of loose monetary policy.

Gold's push to a series of record highs since the financial crisis has been fuelled in part by easy-money policies. The contract for October delivery was down $US38.70, or 2.3%, at $US1617.30 an ounce in New York.

Currencies: Euro dips, then rises
The euro fell against the US dollar as Mr Bernanke began his testimony but quickly reversed to rise to session highs.

In afternoon trading, the euro rose to $US1.3306, up from $US1.3176 late on Monday. The dollar was at ¥76.3 compared with ¥76.64, while the euro was at ¥102.22 compared with ¥100.96.

The UK pound was at $US1.5408 compared with $US1.5432, while the dollar bought 0.9221 Swiss franc from 0.9216 franc.