Dow drops on DuPont's $US6.3b deal

Stocks on Wall Street have fallen as worries mounted over the health of the euro-zone economy and deal activity weighed on the Dow Jones Industrial Average.

At the close (10am NZ time), the Dow was down 37.31 points, or 0.3%, to 11,637.45, its third consecutive decline.

DuPont fell 1.7% after agreeing to acquire Denmark's Danisco, an enzyme and specialty-food-ingredients company, in a $US6.3 billion deal comprising $US5.8 billion in cash and $US500 million of debt.

Among the Dow's handful of gainers, Alcoa rose 0.6% ahead of its fourth-quarter earnings report after the market closes.

The Nasdaq Composite edged up 0.2% to 2707.80 while the S&P 500 index shed 0.1% to 1269.75, pulled down by teleco stocks as investors weighed the gains and losses from Verizon being added as an iPhone carrier.

In other deal-focused activity, Playboy Enterprises soared 17% after agreeing to be taken private by an entity controlled by its founder and controlling shareholder Hugh Hefner for about $US207.3 million, ending a month's long wrangling over the future of the media and entertainment company.

Sara Lee rose 3.4% after private-equity firm Apollo Global Management and investor C Dean Metropoulos formed a group of investors to explore a buyout of the bread and cheesecake maker.

Other markets: Europe down, Asia mixed

Banks led European stocks' losses as worries about sovereign debt returned to the fore. Basic resources were also under selling pressure.

The Stoxx Europe 600 index closed down 0.9% at 278.48. The UK's FTSE 100 index fell 0.5% to 5956.30, France's CAC-40 index ended down 1.6% at 3802.03 and Germany's DAX fell 1.3% to 6857.06.

Most Asian markets declined as concern about monetary tightening and moves to rein in property prices. Indonesian, Chinese and Indian stocks were among the worst affected.

China's Shanghai Composite dropped 1.7% to 2791.81, Hong Kong's Hang Seng Index shed 0.7% to 23527.26, South Korea's Kospi slipped 0.3% to 2080.81 and Singapore's Straits Times fell 1% to 3229.27.

India's Sensex declined 2.4% to 19224.12 and Indonesian shares fell 4.2% to 3478.55.

Among the gainers, Australia's S&P/ASX 200 climbed 0.2% to 4712.29 and Taiwan's Taiex edged up 0.4% to 8817.88. Japanese markets were closed for a holiday.

Commodities: Oil, gold up

Crude futures moved higher after the closure of the Trans Alaska Pipeline for repairs ignited fears about falling supplies.

The shutdown initially sent oil futures up nearly $US2 to $US89.98 a barrel in New York. But futures retreated as traders and analysts said global supplies won't be pressured if the pipeline is restarted soon, as many expect.

Light, sweet crude for February delivery recently traded up $US1.30, or 1.5%, at $US89.33 a barrel. Brent crude on the ICE futures exchange traded $US1.73 higher at $US95.06 a barrel.

Gold futures were pulled in opposite directions between high prices that limit buying and investors who are still cautious about euro zone sovereign debt problems.

The most actively traded contract, for February delivery was up $US4 at $US1372.90 an ounce in New York.

Currencies: Euro up, dollar down

The euro rebounded from a new four-month low against the US dollar, though worries about Europe's debt crisis limited gains.

Portugal, long considered one of the euro zone's most fragile economies, has become the focus of market sentiment. It is scheduled to sell billions of euros worth of bonds this week, and analysts speculate the sale might not go well.

The euro climbed after traders said the European Central Bank bought euro-zone government bonds, including those issued by Portugal, and Portuguese yields fell below 7%.

The euro rose to $US1.2957, above a four-month low it hit in earlier trading at $US1.2860 and up from $US1.2910 late on Friday in New York.

The dollar fell to ¥82.75 from ¥83.04, while the euro was at ¥107.22 from ¥107.21.