A roundup of trading on major world markets:
NEW YORK – US equity markets sank Monday after a three-week rally after a meeting of G20 finance chiefs failed to boost confidence that a solution to the eurozone debt crisis is near.
The Dow Jones Industrial Average closed down 247.49 points (2.13 per cent) to 11,397.00.
The broader S&P 500 fell 23.72 points (1.94 per cent) to 1,200.86, while the tech-heavy Nasdaq Composite slid 52.93 (1.98 per cent) to 2,614.92.
Banks sank on a disappointing earnings report from Wells Fargo and doubt over accounting moves that produced solid returns for Citigroup.
Wells Fargo lose 8.4 per cent and Citigroup fell 1.7 per cent.
JPMorgan Chase, which spruced up its earnings with the same accounting tactic as Citigroup — booking paper gains on the bank’s own debt due to favourably changing interest rate spreads — lost 2.7 per cent. Bank of America, which has not yet delivered its third-quarter earnings, dropped 2.6 per cent.
Bond prices climbed sharply. The yield on the 10-year Treasury fell to 2.16 per cent from 2.23 per cent late Friday, while that on the 30-year Treasury dropped to 3.14 per cent from 3.21 per cent.
Bond yields and prices move in opposite directions.
LONDON – European stocks fell after a German warning against undue enthusiasm that an EU summit this weekend will produce a quick solution to the eurozone debt crisis snuffed out an early rally.
Europe’s main equity markets had opened strongly on Monday in the wake of strong finishes across the Asia-Pacific region, but by mid-afternoon had dropped into negative territory.
The euro, which had rallied in the morning to above $US1.39 for the first time in a month, also fell back after sobering comments from Germany.
At close of trade, Frankfurt’s DAX 30 was down 1.81 per cent to 5,859.43 points, London’s benchmark FTSE 100 index had lost 0.54 per cent to 5,436.70 points, and in Paris the CAC 40 dropped 1.61 per cent to 3,166.06 points.
Milan closed down 2.30 per cent and Madrid dropped 1.24 per cent.
The euro reached an intra-day high of $US1.3914, before tumbling to $US1.3763. That was down from $US1.3881 in New York on Friday. The dollar fell to 76.77 yen from 77.21 yen on Friday.
Gold stood at $US1.682 an ounce, up from $US1.678 on Friday.
Markets also digested major takeover news. US gas pipeline and energy storage giant Kinder Morgan on Sunday announced a deal to buy rival El Paso Corp for about $38 billion.
And on Monday, Norway’s Statoil announced the purchase of US oil company Brigham Exploration for $4.7 billion.
The purchase will give the Norwegian energy giant access to shale oil fields in the Bakken and Three Forks formations in the states of North Dakota and Montana – among the largest oil accumulations in the United States.
British security group G4S meanwhile said it had agreed to buy Denmark-based facilities company ISS for STG5.2 billion, creating the world’s largest security and facilities group.
HONG KONG – Asian markets rose as investors reacted to positive US economic data and news that Europe had vowed to its G20 partners at the weekend to take swift action on tackling its debt crisis.
Tokyo closed 1.50 per cent higher, Sydney ended up 1.70 per cent and Seoul gained 1.62 per cent, while Hong Kong closed 2.01 per cent higher and Shanghai ended the day up 0.37 per cent.
The markets took a lead from Wall Street and European bourses, which jumped Friday amid hopes the G20 meeting would result in a plan to battle Europe’s fiscal woes and prevent the world economy from slipping back into recession.
The euro stood at $US1.3856 in Tokyo trade, down slightly from $1.3881 in New York late Friday. The European single currency edged down to 106.96 yen from 107.17 yen.
The dollar fetched 77.18 yen, little changed from 77.21 yen.
WELLINGTON – New Zealand shares rose in subdued trading amid concerns the annual meeting season will deliver further profit downgrades after three companies lowered their guidance last week.
The NZX 50 Index rose 14.491, or 0.4 per cent, to 3316.96.