Total Investor

US stocks closed lower on Friday and notched their fourth straight losing week, as investors continued worrying about a potential global recession and the health of the European banking system.

The Dow Jones Industrial Average closed down 172.93 points (1.57%) at 10817.65. The index swung 284.99 points from its session highs to the lows in another volatile session. The zigzag action comes after the blue-chip index tumbled 419.63 points on Thursday. The 5.19% drop over Thursday and Friday’s trading sessions is the biggest two-day percentage drop since March 2, 2009.

For the week, the Dow tumbled 4% and is down 15% over the last four weeks. The index is down 6.6% for the year.

Hewlett-Packard Co. was by far the Dow’s biggest decliner as the stock tumbled to a six-year low. Investors fretted about the world’s largest personal-computer maker’s extensive plans to reshape its business model. Shares dropped $5.91 (20%) to $23.60. The stock took 45 points off the price-weighted Dow.

Fellow blue chip International Business Machines Corp. slumped $6.29 (3.8%) to $157.54. H-P and IBM combined to account for more than half of the Dow’s declines.

The Standard & Poor’s 500-stock index dropped 17.12 points (1.5%) to 1123.53, led lower by technology and financial stocks. All 10 of the S&P 500′s sectors closed in negative territory. The index has tumbled 16% over its four-week losing skid.

The Nasdaq Composite slid 38.59 points (1.62%) to 2341.84, a fresh 2011 closing low. The technology-heavy index is down 18% over the last four weeks. For the year, it’s off 12%.

Friday’s lull in market-driven headlines did little to assuage investor concerns about political gridlock in Washington, Europe’s sovereign-debt troubles and the worsening US economy.

Optimism early in the week proved fleeting as worries about global economic growth returned. A jarring mix of global growth warnings from several investment banks and broader systemic financial problems have prompted investors to recalibrate their expectations.

The big worry now is that the problems surrounding European banks could spill over into the US banking system. Investors are also concerned that European leaders aren’t responding adequately to the debt crisis roiling the euro zone.

Base metals ended a volatile week in positive territory on the London Metal Exchange, supported by bargain hunting at lower prices and a softer dollar, although gains were pared in late trade as stock markets slipped back into the red.

Oil settled nearly flat, pausing after steep drops earlier in the week as traders weighed the threat of an economic slowdown against persistent oil demand.

Gold catapulted to another record as fears about the US economy and concerns about Europe’s banks added to bullish sentiment that gold is set to reach $2,000 a troy ounce.

Australian Stock Prices Overnight

In New York, News Corp fell by US$0.51 to US$15.80, equivalent to A$15.22, A$0.38 below its last close on the ASX.

ResMed rose by US$0.26 to US$27.81, equivalent to A$2.68, A$0.02 above its last close on the ASX.

In London, Rio Tinto fell 63.0 pence to £34.32, A$1.00 lower in Australian currency terms.

BHP-Billiton fell 30.0 pence to £18.60, A$0.48 lower in Australian currency terms.

Henderson Group Plc fell 7.0 pence to £1.23, A$0.11 lower in Australian currency terms.

Stocks tumbled amid growing fears of a global recession, as investors confronted a grim mix of US economic data and fresh concerns about Europe’s banks.

The Dow Jones Industrial Average ended down 419.63 points, or 3.68%, to 10990.58. The Standard & Poor’s 500-stock index dropped 53.24 points, or 4.46%, to 1140.65, while the Nasdaq Composite lost 131.05 points, or 5.22%, to 2380.43.

In the flight to safety on Thursday, investors piled into gold, which jumped to a record of $1,818.90 a troy ounce. In the Treasurys market, the yield on the benchmark 10-year note briefly dipped below 2% in intraday trading for the first time since at least 1954, as investors sought refuge in US debt.

The heaviest selling came in energy and materials stocks, as commodities prices sank. Among Dow components, United Technologies fell $3.93 a share, or 5.5%, to $68.12; Alcoa lost 75 cents, or 6.1%, to 11.51; and Caterpillar tumbled 4.31, or 4.9%, to 88.33. Among big oil firms, Chevron lost 4.44, or 4.6%, to 93.24 and Exxon Mobil was off 3.22, or 4.3%, to 70.94.

Bank stocks were also under significant pressure. Bank of America was the biggest decliner among the Dow components, tumbling 45 cents, or 6%, to 7.01, while J.P. Morgan Chase lost 1.38, or 3.8%, to 35.19. Citigroup fell 1.87, or 6.3%, to 27.98 while Morgan Stanley declined 81 cents, or 4.8%, to 16.20.

Hewlett-Packard, one of the biggest stock laggards on the day, briefly reversed its morning slump after reports that the world’s biggest computer maker will spin off its personal-computer business and is close to a $10 billion deal to acquire UK software firm Autonomy. H-P, which took the unusual step of reporting quarterly earnings during trading hours, fell 1.88, or 6%, to 29.51 despite earnings and revenue coming in largely in line with analyst expectations.

Transportation stocks, which are particularly sensitive to economic growth concerns, were hit hard. The Dow Jones Transportation Average, an index of 20 railroad, airline and shipping stocks, tumbled 6.1%. American Airlines parent AMR fell 26 cents, or 6.8%, to 3.54; Kansas City Southern dropped 6.49, or 12%, to 47.47; and FedEx lost 4.67, or 5.9%, to 74.46.

All 10 sectors of the S&P 500 were lower, with 98% of the 500 component stocks falling. The CBOE Market Volatility Index, the “fear gauge” known as the VIX, surged 37%.

Trading volumes were in line with recent trading days, which have seen a jump in activity. About 6.3 billion shares changed hands in New York Stock Exchange composite volume, well above the daily average this year of about 4.3 billion shares.

Base metals limped to a sharply lower close on the London Metal Exchange as a broad-market sell-off sent investors fleeing risky assets.Crude oil tumbled 5.9% as weakening economic data in the US sparked renewed fears of a global downturn.Fears that prospects for growth in the US and Europe were slipping pushed gold to their third record in as many days, as investors fled sinking equities markets and turned to perceived refuge assets.

Australian Stock Prices Overnight

In New York, News Corp fell by US$0.91 to US$16.31, equivalent to A$15.75, A$0.15 below its last close on the ASX.

ResMed fell by US$1.50 to US$27.55, equivalent to A$2.66, A$0.09 below its last close on the ASX.

In London, Rio Tinto fell 244.5 pence to £34.95, A$3.89 lower in Australian currency terms.

BHP-Billiton fell 132.0 pence to £18.90, A$2.10 lower in Australian currency terms.

Henderson Group Plc fell 8.5 pence to £1.30, A$0.14 lower in Australian currency terms.

US stocks managed a slight gain as investors weighed earnings from some high-profile retailers against signs of rising input costs and continued dissatisfaction over efforts to find a solution to Europe’s debt woes.

The Dow Jones Industrial Average inched up 4.28 points, or 0.04%, to 11410.21, after gaining 124 points early in the session. The Standard & Poor’s 500-stock index gained 1.13 points, or 0.09%, to 1193.89, while the Nasdaq Composite fell 11.97 points, or 0.47%, to 2511.48.

Pulling on the upside were stocks in the most defensive sectors: telecommunications, utilities and consumer staples. Verizon Communications gained 2.1%, AT&T added 1.3%, and Coca-Cola rose 1.6%.

Leading the decliners were technology stocks. Hewlett-Packard fell 3.7% to lead the Dow laggards, after rival Dell tumbled 10%. Investors dumped shares in computer maker Dell after it reported slowing sales and lowered its full-year revenue target.

Other tech giants fell, with Cisco Systems down 0.9%, Intel off 0.6%, and Microsoft shedding 0.4%.

Retail stocks were in focus on Wednesday, after a batch of high-profile names reported earnings.

Target rose 2.4% after its quarterly earnings report topped estimates, driven by same-store sales growth. Staples edged up 0.5% after it reported second-quarter profit that topped forecasts. Abercrombie & Fitch fell 8.7% as rising costs from increased raw-material costs cut into profit margins, though fiscal-second-quarter earnings rose 64% amid rising sales at the teen-apparel retailer.

Base metals finished firmly higher on the London Metal Exchange, as a weaker dollar and technical buying above key resistance levels conspired to push the metals into slightly higher ranges. Crude oil prices settled higher after an industry report showed a bigger-than-expected drop in US gasoline inventories. Gold settled at record highs as reports that Venezuela plans to nationalize its gold industry gave prices a late-afternoon boost.

Australian Stock Prices Overnight

In New York, News Corp fell by US$0.09 to US$17.22, equivalent to A$16.35, A$0.09 below its last close on the ASX.

ResMed fell by US$0.06 to US$29.05, equivalent to A$2.76, A$0.05 below its last close on the ASX.

In London, Rio Tinto rose 10.0 pence to £37.39, A$0.16 higher in Australian currency terms.

BHP-Billiton rose 6.95 pence to £20.21, A$0.11 higher in Australian currency terms.

Henderson Group Plc fell 3.5 pence to £1.39, A$0.05 lower in Australian currency terms.

US stocks fell on Tuesday after three straight sessions of sharp gains, as investors expressed disappointment over proposed measures from European officials to strengthen euro-zone fiscal governance.

The Dow Jones Industrial Average dropped 76.97 points, or 0.67%, to 11405.93. The blue-chip index whipped around in another rocky trading day, although the volatility wasn’t as extreme as last week’s trading.

The Dow, which briefly turned positive at one point, fell as much as 190 points. Comments from German Chancellor Angela Merkel and French President Nicolas Sarkozy failed to alleviate investor concerns about the economic state of the euro zone.

The Standard & Poor’s 500-stock index lost 11.73 points, or 0.97%, to 1192.76. The technology-oriented Nasdaq Composite slumped 31.75 points, or 1.24%, to 2523.45.

Financial stocks were hit the hardest as Merkel and Sarkozy pledged to launch a transaction tax. NYSE Euronext–which runs stock and derivatives markets in France, Belgium, the Netherlands and Portugal–was the S&P 500′s biggest decliner. The stock dropped $2.43, or 8.4%, to 26.54. IntercontinentalExchange shares dropped 5.21, or 4.5%, to 111.22. Nasdaq OMX Group dropped 65 cents, or 2.8%, to 22.97.

In a joint appearance, Merkel and Sarkozy proposed a euro-zone economic council that would help strengthen national fiscal solvency. But both leaders opposed the issuance of euro-zone bonds, an idea that had gained traction in recent days, which disappointed investors.

The market’s downbeat tone originated after data showed the euro-zone economy grew more slowly in the second quarter than at any time since the end of the recession in 2009. In particular, economic growth in Germany, Europe’s largest economy, slowed sharply.

On the US economic front, the Commerce Department said home construction dropped slightly in July as the battered housing market continues to struggle. Additionally, the Labor Department said US import prices increased last month as both fuel and nonfuel costs rose, reversing some of June’s declines but leaving the overall inflation picture subdued.

Industrial production in the US also rose slightly last month, as auto makers recovered from natural disasters earlier this year in Japan.

Base metals closed mostly lower on the London Metal Exchange following a lackluster open outcry session characterized by hesitant, short-term trade. Gold ended at a record high as slowing growth in the European Union sent investors looking for an alternate store of wealth. Crude oil prices settled lower, guided by continued doubts on the pace of global economic growth.

Australian Stock Prices Overnight

In New York, News Corp rose by US$0.12 to US$17.31, equivalent to A$16.53, A$0.23 above its last close on the ASX, ResMed fell by US$0.15 to US$29.11, equivalent to A$2.78, A$0.02 below its last close on the ASX. In London, Rio Tinto rose 35.0 pence to £37.29, A$0.55 higher in Australian currency terms, BHP-Billiton fell 53.5 pence to £19.86, A$0.84 lower in Australian currency terms, and Henderson Group Plc was unchanged at £1.42.

US stocks advanced Monday, wiping out last week’s losses, as corporate deal making helped send the market to the biggest three-day winning streak since March 2009.

The Dow Jones Industrial Average finished 213.88 points higher, or 1.90%, to 11482.90, closing near session highs for a third straight advance. The Dow’s first three-day string of gains since July 1 was also its biggest three-day percentage rise since March 12, 2009, and the biggest in point terms since Nov. 25, 2008.

The Standard & Poor’s 500-stock index ended with a 25.68-point gain, or 2.18%, at 1204.49, led by the utility and energy sectors. The technology-oriented Nasdaq Composite gained 47.22 points, or 1.88%, to 2555.20. Like the blue-chip Dow, both indexes posted their biggest percentage gain since March 2009. All three wiped out their losses from last week’s volatile trading.

Motorola Mobility Holdings soared 13.65, or 56%, to 38.12, leading the S&P 500, after Google agreed to acquire the company for about $12.5 billion in cash. The move was seen helping Google compete more directly with Apple in the competitive mobile-communications industry. It also gives Google a trove of coveted mobile-device patents. Google’s shares lost 6.54, or 1.2%, to 557.23.

Bank of America rose 57 cents, or 7.9%, to 7.76, leading blue-chip stocks after another instance of deal making. The company sold an $8.6 billion Canadian credit-card portfolio to Toronto-Dominion Bank for an undisclosed amount. It also announced plans to shed its much-larger consumer credit-card operations in the UK and Ireland.

In a third deal, Time Warner Cable said it plans to acquire cable operator Insight Communications in a cash deal valued at $3 billion, edging out a line of bidders that included Cablevision Systems. Time Warner Cable’s stock shed 49 cents, or 0.8%, to 65.02, while Cablevision advanced 39 cents, or 2.1%, to 19.13.

The deals overshadowed data that showed a third consecutive drop in New York-area manufacturing activity, undershooting economists’ expectations and pointing to continued sluggishness in the broader economy.

Separate data, released 30 minutes after the opening bell, showed US home builder confidence remained weak in August, as the National Association of Home Builders’ housing index held steady at 15.

Base metals closed mixed after drifting sideways in quiet trade throughout most of the session, and market participants say they expect prices to await cues from macro developments and world equity markets in the days ahead. Gold snapped a two-day losing streak to finish higher as a weaker dollar mitigated selling pressure triggered by stronger risk appetite. Crude oil prices settled higher, guided by weakness in the dollar and a strong showing by US equities.

Australian Stock Prices Overnight

In New York, News Corp rose by US$0.52 to US$17.19, equivalent to A$16.38, A$0.28 above its last close on the ASX, ResMed rose by US$0.57 to US$29.26, equivalent to A$2.79, A$0.03 below its last close on the ASX, In London, Rio Tinto rose 5.5 pence to £36.94, A$0.09 higher in Australian currency terms, BHP-Billiton rose 21.5 pence to £20.40, A$0.34 higher in Australian currency terms, and Henderson Group Plc rose 1.1 pence to £1.42, A$0.02 higher in Australian currency terms.

US stocks closed higher on Friday as an upbeat retail sales report trumped a weak reading on consumer confidence, capping one of the most volatile weeks in Wall Street history.

The Dow Jones Industrial Average finished up 125.71 points, or 1.13%, at 11269.02. The blue-chip index suffered a 1.53% weekly loss despite registering back-to-back gains for the first time since July 7. The Dow also produced triple-digit moves in all five days for the first time since January 2010.

Friday’s trading capped a week of violent daily gyrations. The Dow had surged 423 points in Thursday’s session, marking the first time in the index’s 115-year history that it moved by more than 400 points in four straight days of trading.

The index, which snapped that streak on Friday, is now on a three-week losing skid, dropping 11.1% over that time span.

Boeing was the Dow’s biggest gainer, rising $2.90, or 4.9%, to 61.75. Hewlett-Packard rose 1.27, or 4.1%, to 32.32 and United Technologies gained 2.71, or 3.9%, to 72.45.

Bank of America was the Dow’s biggest loser this week, dropping 12%. It fell six cents, or 0.8%, to 7.19.

The Standard & Poor’s 500-stock index gained 6.17 points, or 0.53%, to 1178.81, led by industrial and consumer discretionary stocks. The index notched its second straight day of gains for the first time since July 22.

For the week the S&P 500 dropped 1.72%. It’s down 12% throughout its three-week losing skid.

The Nasdaq Composite rose 15.30 points, to 0.61%, to 2507.98. For the week, the technology-oriented index dropped 0.96%.

The daily moves this week were the wildest since the depths of the financial crisis in late 2008. Investors this time are worried about a possible double-dip recession in the US and the euro zone’s debt crisis spreading to bigger members of the 17-nation bloc.

The market gravitated toward a positive reading on consumer spending. Retail sales, an important indicator of consumer spending and typically a major driver of economic growth, rose 0.5% in July. Consumers spent more on gasoline, electronics and other merchandise, potentially easing concerns that Americans are pulling back.

The data overshadowed an indicator of consumer sentiment that showed a sharp fall in August. The consumer sentiment index from Reuters/University of Michigan tumbled to 54.9 in mid-August, the lowest level since 1980 and down sharply from 63.7 in late July. Economists had expected the reading to ease only to 62.

Base metal prices closed mostly lower after a volatile week of trading, with industry participants still struggling to get a clear sense of where the markets are heading in the short term. Crude oil prices ended a wild week modestly lower as traders continue to take the pulse of the struggling US economy. Gold logged its second straight day of losses as some investors cashed in recent gains while others grew more confident and ventured away from the safe haven to riskier assets such as equities.

Australian Stock Prices Overnight

In New York, News Corp rose by US$0.08 to US$16.67, equivalent to A$16.08, A$0.42 above its last close on the ASX, ResMed rose by US$0.48 to US$28.69, equivalent to A$2.77, A$0.03 above its last close on the ASX, In London, Rio Tinto rose 157.0 pence to £36.89, A$2.46 higher in Australian currency terms, BHP-Billiton rose 52.0 pence to £20.18, A$0.82 higher in Australian currency terms, and Henderson Group Plc rose 6.4 pence to £1.41, A$0.10 higher in Australian currency terms.

US stocks notched a massive advance on Thursday, as investors seized on favourable corporate and economic reports to recover most of the ground they lost in the previous session.

The blue-chip Dow Jones Industrial Average soared 423.37 points (3.95%) to 11,143.31, the second biggest point and percentage gain this year. It was the fourth straight move of 400 points or greater, a first in the Dow’s history.

The action followed a 519.83-point slump on Wednesday that was the blue-chip index’s ninth-largest point drop ever, reflecting mounting worries about the health of Europe’s banks and the chances of a global economic recession.

Thursday’s two big catalysts were a rare favourable weekly employment report and signs of a turnaround at networking-equipment maker Cisco Systems. The absence of troublesome new developments in European sovereign debt and banking also helped. Markets have swung violently this week and last as investors weighed the chances of a global economic recession, and as they fretted over further debt turmoil on two continents.

The huge swing to the upside relieved some investors, but to others it was more a symptom of the extreme volatility that has gripped the markets.

The Standard & Poor’s 500-stock index jumped 51.88 points (4.63%) to 1,172.64, led by battered financial stocks. The Nasdaq Composite surged 111.63 points (4.69%) to 2,492.68. Like the Dow, both indexes’ gains were the second largest all year in point and percentage terms.

Cisco Systems was the strongest blue-chip stock, surging $2.19 (16%) to $15.92, after a earnings report that was highlighted by stronger-than-expected revenues. Chief Executive John Chambers said the company was making “solid progress” in its turnaround effort.

The number of people claiming new jobless benefits fell last week to the lowest level in four months, dropping to a seasonally adjusted 395,000 in the week ended Aug. 6., a small bright spot in a persistently weak US labour market that boosted investor sentiment on Thursday.

Downward pressures from Europe eased following reports that the Continent’s markets may ban so-called naked short selling, which could relieve some of the immediate stress on stocks. In a “naked” short, investors sell a financial instrument without first borrowing it. Europe stocks finished sharply higher.

Major indexes were still creaking under the weight of the recent market downdraft. The blue-chip Dow has fallen 8.2% for the month in spite of the large Thursday advance, while the S&P 500 has shed 9.3% and the Nasdaq has lost nearly 9.6%.

The price of copper bounced back toward $9,000 a metric ton on the London Metal Exchange as base metals benefited from a better-than-expected US labour market report. Gold prices buckled under pressure from anxious investors who cashed in recent gains in a bid to keep their wealth safe, but losses were limited as traders kept a weary eye on Europe’s sovereign debt problems. Oil shot to its highest level all week, powered by a stock-market rally and an upbeat report on the US labour market.

Australian Stock Prices Overnight

In New York, News Corp rose by US$2.38 to US$16.59, equivalent to A$16.06, A$1.31 above its last close on the ASX.

ResMed rose by US$1.53 to US$28.21, equivalent to A$2.73, A$0.08 above its last close on the ASX.

In London, Rio Tinto rose 115.0 pence to £35.32, A$1.81 higher in Australian currency terms.

BHP-Billiton rose 95.0 pence to £19.61, A$1.49 higher in Australian currency terms.

Henderson Group Plc rose 5.8 pence to £1.34, A$0.09 higher in Australian currency terms.

US stocks slumped as investors were squeezed between fears of further contagion among European banks and the Federal Reserve’s gloomy economic outlook.

The Dow Jones Industrial Average plunged 519.83 points (4.62%) to 10,719.94, more than reversing the previous day’s exuberant gains. The Standard & Poor’s 500-stock index slid 51.77 points (4.42%) to 1,120.76 and the Nasdaq Composite lost 101.47 points (4.09%) to 2,381.05.

All 30 of the Dow components and all 10 of the S&P 500 sectors were in negative territory, with just 11 of the S&P 500 components finishing in positive territory. In a reflection of investor concern, the CBOE Market Volatility Index, the “fear gauge” known as the VIX, surged 23%.

Leading the declines were financial stocks, with Citigroup falling 10%, Bank of America off 11%, JP Morgan Chase down 5.6% and American Express shedding 7.2%.

Walt Disney was the steepest decliner among the Dow components for most of the day, tumbling 9.1% after the blue-chip media and entertainment conglomerate reported results that topped analyst expectations, but raised analyst concerns about decelerating advertising rate growth.

The stock declines follow several days of volatile trading, including the biggest day of Dow gains in more than two years on Tuesday. The blue-chip index had rallied sharply in the final hour to close Tuesday up 430 points after the Federal Reserve said it would leave rates exceptionally low through mid-2013. Initially, though, the Dow slumped to an 11-month low as the Fed said economic growth had been “considerably slower” than expected.

Base metals closed mixed on Wednesday after fresh euro-zone debt fears and a slump across the stock markets dragged them from their earlier highs. A gold rush swept across the global investment community on Wednesday, sending prices above $1,780 on fears that France may lose its top-notch credit rating. Oil rallied sharply after a government report suggested better-than-expected US oil demand last week.

Australian Stock Prices Overnight

In New York, News Corp fell by US$0.70 to US$14.21, equivalent to A$14.01, A$0.20 below its last close on the ASX.

ResMed fell by US$0.42 to US$26.68, equivalent to A$2.63, A$0.01 below its last close on the ASX.

In London, Rio Tinto fell 131.5 pence to £34.17, A$2.09 lower in Australian currency terms.

BHP-Billiton rose 56.92 pence to £19.68, A$0.90 higher in Australian currency terms.

Henderson Group Plc fell 6.7 pence to £1.28, A$0.11 lower in Australian currency terms.

US stocks soared in turbulent trading on Tuesday, coming off the worst three-day selloff since the financial crisis, as investors took in stride the Federal Reserve’s pledge to keep interest rates near zero at least through mid-2013.

The Dow Jones Industrial Average finished near session highs, up 429.92 points (3.98%) at 11,293.77. The index, which had gained as much as 243 points at its morning high, saw its rally fade ahead of the Fed decision and then turned negative after the statement was released. It fell as much as 206 points before it turned positive again and marched sharply higher in the final trading hour.

The volatile trading came as the Fed signalled it will keep its benchmark short-term interest rate close to zero for at least another two years. The central bank also sharply downgraded its view of the US economy.

In a statement after a one-day policy meeting, Fed officials said they expect the weak economy to warrant exceptionally low levels for the federal funds rate “at least through mid-2013.” Seven voted in favour of this action, and three voted against it. Fed officials also downgraded their assessment of the US economy for the third time this year, saying that economic growth so far this year has been “considerably slower than…expected.”

The Dow’s sharp gains came after it fell 635 points on Monday, the sixth-biggest point drop in its history. Jittery investors have fretted in the wake of Standard & Poor’s downgrade of the US government’s credit rating and the possibility that the economy could slide into another recession.

The Standard & Poor’s 500-stock index rose 53.07 points (4.74%) to 1,172.53, led higher by the financials and material sectors. The S&P 500′s financial sector, which was hit the hardest in Monday’s drubbing, finished up 8.2%.

The technology-oriented Nasdaq Composite gained 124.83 points (5.29%) to 2,482.52.

Investors were looking for clues pertaining to any options the Fed may have to boost the economy and combat the market’s recent slide. While the Fed didn’t announce a bold step of buying more bonds that some in the markets were hoping for, the move to keep the benchmark short-term interest rate near zero may help keep borrowing rates low and drive investors into riskier assets, like stocks.

Base metals closed mostly higher on Tuesday, propped up as equity markets cut their losses and the euro bounced against the US dollar. Gold raced higher after the Federal Reserve said the weak economy will warrant low interest rates until “at least” mid-2013, jumping nearly $25 above its record settlement price in the minutes following the report as it lived up to its “safe harbour” label. Crude settled below $80 a barrel for the first time in nearly 10 months, extending declines after the Federal Reserve vowed to keep interest rates low but stopped short of promising further economic stimulus.

Australian Stock Prices Overnight

In New York, News Corp rose by US$0.90 to US$14.91, equivalent to A$14.36, A$0.60 above its last close on the ASX.

ResMed rose by US$1.34 to US$27.10, equivalent to A$2.61, the same as its last close on the ASX.

In London, Rio Tinto rose 160.5 pence to £35.48, A$2.52 higher in Australian currency terms.

BHP-Billiton rose 54.5 pence to £19.01, A$0.86 higher in Australian currency terms.

Henderson Group Plc rose 2.1 pence to £1.35, A$0.03 higher in Australian currency terms.

US stocks tumbled in a Monday rout that sent the Dow Jones Industrial Average plunging to the sixth biggest point drop in its history, reflecting a toxic brew of investor fears over government debt and the chances that the economy will slide into another recession.

The Dow Jones Industrial Average plunged 634.76 points (5.55%) to 10,809.85, falling beneath 11,000 for the first time since November and adding to last week’s steep losses. The blue-chip measure ended exactly on session lows, in a harried trading day that was the stock markets first since Standard & Poor’s downgraded the federal government’s credit rating late on Friday. Investors’ flight from risk struck assets far and wide. Most-active December gold futures soared to a record settlement of $1,713.20, up $61.40 and US Treasurys were a winner despite the credit downgrade, with yield on the 10-year note falling to the lowest levels since January 2009.

Major stock indexes cascaded lower throughout much of the session, as S&P added downgrades of clearing bodies, entities such as Fannie Mae and Freddie Mac and lowered outlooks for companies including Warren Buffett’s Berkshire Hathaway, following the Friday US credit rating cut to double-A-plus from triple-A.

The Standard & Poor’s 500 stock index tumbled 79.92 points (6.66%) to 1,119.46. Financial and energy stocks fell the hardest. Not a single S&P 500 component ended in positive territory. The Nasdaq Composite slumped 174.72 points (6.9%) to 2,357.69.

The Russell 2000 index of small-capitalisation stocks was hit hardest, falling 63.67 points (8.91%) to 650.96. Small caps tend to make more exaggerated moves and are generally viewed as riskier than the widely held shares of large companies.

The fact that Monday’s swoon came right on the heels of the Dow’s biggest weekly point loss since the financial crisis in 2008 set up many market participants for forced sales and margin calls, traders said. That made some of the losses self-perpetuating. It also raised the prospect of capitulation, the point when losses snowball and sentiment craters, helping markets find a bottom.

Bank of America plunged 20% to lead blue-chip decliners, stung by both a steep selloff in financial stocks and by word that American International Group Inc. is suing the company, along with a host of other prominent financial institutions, as it seeks to recover losses on mortgage-backed securities. AIG’s stock fell 10%.

President Barack Obama did little to assuage investor fears on Monday afternoon as he said that the S&P downgrade should provide a “renewed sense of urgency” to tackle the deficit. Indexes hit fresh lows while the president spoke, and again afterward.

Base metal prices took a battering on Monday, closing sharply lower across the board after Standard & Poor’s downgrade of US debt drove investors out of risky investments and into safe haven assets such as gold. Gold soared to a record as investors scrambled to shed riskier holdings in the wake of the US credit downgrade. Oil futures fell to their lowest level in almost nine months on Monday.

Australian Stock Prices Overnight

In New York, News Corp fell by US$1.16 to US$14.01, equivalent to A$13.78, A$0.17 below its last close on the ASX.

ResMed fell by US$2.41 to US$25.76, equivalent to A$2.53, A$0.13 below its last close on the ASX.

In London, Rio Tinto fell 234.5 pence to £33.88, A$3.76 lower in Australian currency terms.

BHP-Billiton fell 33.9 pence to £19.11, A$0.54 lower in Australian currency terms.

Henderson Group Plc fell 7.6 pence to £1.33, A$0.12 lower in Australian currency terms.