Wednesday, October 19, 2011

Stocks fall, euro dips as EU summit hopes fade

World stocks declined and the euro pared gains on Wednesday after optimism faded that European leaders will make substantial progress on the euro zone debt crisis this weekend.

A report from the Federal Reserve that the US economic outlook dimmed in September also sapped sentiment, even though the Fed's survey of conditions across the country found that the economy continued to grow slightly in September.

The Dow Jones industrial average was down 93.85 points, or 0.81 percent, at 11,483.20. The S&P 500 Index was down 16.56 points, or 1.35 percent, at 1,208.82. The Nasdaq Composite Index was down 53.37 points, or 2.01 percent, at 2,604.06.

European shares rose, snapping two days of losses, led by bank stocks on hopes a European Union summit will result in a comprehensive plan to resolve the region's debt crisis.

The pan-European FTSEurofirst 300 index of top shares closed up 0.6 percent at 968.11 points, but volume was low at 78.1 percent of its 90-day daily average, indicating a lack of conviction behind the gains.

The Nikkei stock average also rose on expectations that Europe will act to strengthen the euro zone's rescue fund, though skepticism about whether it can put bold steps into practice curbed gains.

The Nikkei climbed 0.4 percent at 8,772.54, after rising as high as 8,831.55, while the broader Topix index stood flat at 751.49.