Wall Street stocks slip after biggest one-day jump in year

In a choppy session, stocks on Wall Street ended lower after the prior session's biggest single-day jump in more than a year.

Aluminum giant Alcoa led declines in the Dow industrials as worries grew that a possible further tightening in China could impact demand for materials.

Merck was also weak, off 2.2%, after the drug developer said it has ended development of its first stab at a follow-on biologic drug.

After rising as high as 90 points, the Dow Jones Industrial Average closed the session 36.88 points, or 0.3%, down at 10,748.26.

Intel was among the Dow components climbing after its chief executive told investors the company anticipates annual earnings growth in the low double-digits in the next few years. Read more about Intel.

The S&P 500 Index was also 0.3% lower at 1155.79, with consumer discretionary shares fronting sector gains among the index's 10 industry groups.

The Nasdaq Composite Index changed less than a point for a light gain to 2375.31.

Other markets

European stocks ended lower as signs the UK was close to forming a government helped dispel doubts surrounding the massive euro-zone rescue package.

Traders expected stocks to drop after Monday’s euphoric rise, and they did, but steady gains in the afternoon lifted most indexes to their highest levels of the day.

Germany's DAX eked out a gain of 0.3% to 6037.71 while the pan-European Stoxx 600 index, down more than 2% during the morning, ended off a more modest 0.5% at 252.93 after Monday’s 7.2% gain.

The UK's FTSE 100 index fell 1% to 5334.21 and France's CAC-40 index eased 0.7% to 3693.20.

In Asia, Hong Kong and mainland Chinese shares slid as the fear of monetary tightening by Beijing resurfaced after economic data revealed consumer and property prices continued to rise. Most other Asian markets also declined.

In Shanghai, the Shanghai Composite slid 1.9% to finish at 26,47.57, while Hong Kong's Hang Seng Index fell 1.4% to 20,146.51.

In Tokyo, the Nikkei Stock Average of 225 companies finished 1.1% lower at 10,411.10 as the yen reversed Monday's sharp fall against major currencies, hurting the prospects of exporters. Toyota Motor dropped 0.7% and Canon gave up 1.3%.

In Sydney, the S&P/ASX 200 also declined 1.1%, to 4547.99 ahead of last night’s Budget, which promised a return to surplus within three years.

The government's proposed super tax on the resources sector continued to drag down mining stocks. BHP Billiton slid 2.2% and Rio Tinto fell 2.5%, while Fortescue Metals Group sank 5%.

Korea's Kospi dropped 0.4% to 1670.24. Taiwan's Taiex declined 0.7% to 7608.44. India's Sensitive Index fell 1.1% to 17,141.53 and Singapore's Straits Times Index dropped 0.8% to 2857.67.

Commodities: Oil, gold up

Oil futures reversed earlier losses to rise above $US77 a barrel as energy demand in China overcame doubts about the longer-term implications of the trillion-dollar euro rescue plan.

A drought in China is causing sharp declines in hydroelectricity and a spike in oil demand.

Crude oil for June delivery gained back 23USc, or 0.3%, to $US77.04 a barrel in New York.

Gold futures settled at a record above $US1220 an ounce as the long-term implications of the euro rescue package lured investors into safe-haven assets.

Gold for June delivery, the most active contract by volume and open interest, added $US19.50, or 1.6%, to close at $US1220.30 an ounce in New York. The exchange confirmed that this was a record settlement for the gold contract.

Currencies: Pound up, euro down

The UK pound moved higher as the impending formation of a new Conservative-led government ended uncertainties arising from the inconclusive election result.

The euro was trading at £0.8478 from £0.8605 late on Monday. Sterling was at $US1.4981, up from $US1.4860.

The euro was at $US1.2732, down from $US1.2775. The dollar was at ¥92.92 from ¥93.15, while the euro was at ¥118.02 from ¥119.00.