US stocks fell Wednesday, with Bank of America, JP Morgan Chase and Exxon Mobil among the decliners after worries about global growth re-emerged.
The Dow Jones Industrial Average dropped 40.73 (0.41%) to 9,899.25. The measure's financial components were among its weakest, as Bank of America declined 32 cents (2.1%) to $15.01, and JP Morgan Chase slipped 66 cents (1.8%) to $37.12. Exxon Mobil was also among the Dow's top decliners, with a drop of $1.21 (2%) to $60.03.
The Nasdaq Composite fell 11.72 (0.54%) to 2,158.85, its lowest close since Feb. 10. The Standard & Poor's 500 declined 6.31 (0.59%) to 1,055.69. The energy and financial sectors led the S&P 500's drop.The Dow spent much of Wednesday's session in the black but turned lower in the final hour after Chancellor Angela Merkel defended Germany's EUR80bn austerity package for the next four years, saying that the time to withdraw stimulus has come and lessons from the debt crisis must be learned.
The comments came despite investors having spent most of Wednesday's session feeling better about the global economy, thanks to a Reuters report that Chinese exports surged about 50% in May and a prediction from Federal Reserve Chairman Ben Bernanke for US economic growth this year and next.
American depositary shares of BP tumbled $5.48 (16%) to $29.20, after the US government's point man on the Gulf of Mexico oil spill sharply criticized the company in a letter released Wednesday, saying BP was taking too long to process compensation claims filed by people whose livelihoods have been affected by the disaster. Meanwhile, expectations are increasing that the company will cut dividends to help pay for the Gulf of Mexico disaster.
For Australian ADRs listed on the NYSE, BHP Billiton weakened 7 cents (0.11%) to $61.54. Rio Tinto Plc fell 14 cents (0.31%) to $44.76. ResMed weakened 14 cents (0.22%) to $62.69. Telstra Corporation improved 3 cents (0.23%) to $12.98. Telecom Corporation of NZ dropped 2 cents (0.33%) to $6.06, and Westpac shed $1.59 (1.7%) to $91.68.
At 7:45 AM (AEST), the 10-year US Treasury note yield was 3.17% and the five year yield was 1.97%.
European shares closed higher on Wednesday, lifted as investors responded to updates and deals from retailer Inditex, aerospace giant EADS and banking group Santander.
The Stoxx Europe 600 index rose 1.9% to close at 244.60, partially reversing losses of 3.6% made over the last three sessions.
The volatile mining and financial sectors gained on Wednesday with mineral extractor Kazakhmys rising 4.4% and French bank Societe Generale shares gaining 4.7%.
Autos were also strong, with Daimler shares up 4.2%.
The German DAX index rose 2% to settle at 5,984.75 and the French CAC-40 index gained 2% to finish at 3,446.77.
The UK FTSE 100 index ended 1.1% higher at 5,085.86.
The commodity-heavy UK index struggled as BP shares fell 4.2%, bringing quarter-to-date losses to around 37%.
However, Rio Tinto climbed 85.00 pence (2.78%) to 3,072.08 pence. BHP Billiton increased 49.50 pence (2.8%) to 1,816.95 pence.
Asian markets were mixed although the Shanghai Composite index rose sharply in afternoon trading amid a report of upbeat export and loan growth data for May, though Japanese stocks slid to a fresh low for 2010, hurt by weak exporters.
Japan's Nikkei Stock Average fell 1.0% to finish at 9,439.13 for its lowest close so far this year. South Korea's Kospi dropped 0.3% and Taiwan's Taiex closed 1.1% lower.
China's Shanghai Composite was the day's best performer among the major regional bourses. The benchmark index fell to a low of 2,501.12 in afternoon trading, before getting a shot in the arm from a strong rally in banking shares. The index ended up 2.8% at 2583.87, with China Citic Bank Corp up by the day's 10% limit, while Bank of Nanjing rose 9.8% and China Construction Bank gained 3.0%.
The jump came amid expectations that Beijing would act to support the market ahead of Agricultural Bank of China's upcoming multi-billion dollar initial public offering.
The gains in Shanghai also helped a recovery in Hong Kong, where the Hang Seng Index finished 0.7% higher at 19621.24, also reversing early losses as Chinese financials posted handsome gains. Bank of China and Industrial & Commercial Bank of China gained 1.1% each, while China Life Insurance rose 1.7%.
Shares in Japan lost ground on futures-related selling ahead of the contract settlement on Friday. The market shrugged off new Prime Minister Naoto Kan's unveiling of a cabinet on Tuesday that signaled a heightened resolve to curb public debt as investors awaited detailed policy plans.
New Zealand shares ended higher Wednesday, bolstered by improving sentiment on Wall Street.
The benchmark NZX-50 ended up 0.4%, or 11.13 points, at 3,000.11.
Strong Chinese export data and a recovering euro drove base metals higher on the London Metal Exchange Wednesday. A Reuters report saying Chinese exports rose about 50% on the year in May gave a lift to commodity and equity markets. The better-than-expected numbers eased worries that monetary tightening would put a brake on growth in one of the world's fastest growing economies. Aluminium rose $20 (1.05%) to $1,930 while copper firmed $195 (3.18%) to $6,325 and nickel added $635 (3.44%) to $19,085. Zinc strengthened $40 (2.33%) to $1,755 and lead gained $35 (2.15%) to $1,665. Copper rose to a three-day high of US$6,384.75 a metric ton, while lead and nickel gained roughly 4% each. Comex copper was last quoted at US$2.7795 per pound.
Gold futures dropped as the Chinese export reports and positive comments from the US Fed chief eased some of the fear that only one session before had sent the metal to record highs. Most-actively traded gold, for August delivery, fell $15.70, or 1.3%, to settle at $1,229.90 an ounce.
Spot gold was last quoted at $1,230.35. Spot silver was last quoted at $18.07.
Crude futures jumped Wednesday as US oil inventories fell for a second-straight week, a signal that supplies have abated in the face of tepid demand.
West Texas Intermediate drifted sideways and was last quoted at $74.36.
At 7:45 AM (AEST) the US dollar was quoted at 0.8347 euros, 91.25 yen, 68.82 pence, and 1.209 AUD.