21 Nov 2012

Wall Street down

9:11 am on 21 November 2012

Stocks on Wall St extended losses after Federal Reserve chairman Ben Bernanke added to worries about the economic impact of the fiscal cliff facing the United States.

Mr Bernanke said in New York that the Fed does not have the tools to offset the damage that would result if politicians fail to strike a deal to prevent going off the fiscal cliff.

If a solution is not approved in time, then mandatory tax increases and spending cuts will go into effect early next year.

Mr Bernanke said he does not believe the possible benefits of cutting the interest paid on bank reserves are sufficient to outweigh the risk of trouble in money markets.

The Dow Jones Index was down 41 points, or 0.3%, to 12,755. The Nasdaq Composite was down 7 points, or 0.3%, to 2909.

Earlier in Europe: FTSE 100 in London rose 0.2%, the DAX in Frankfurt rose 0.7% and the CAC-40 in Paris was up 0.7%.

The Australian 200 Index rose 24 points, or 0.6%, to close at 4386 and the NZX50 index rose 30 points, or 0.8%, to close at 3973.

The New Zealand dollar on Wednesday was trading at 81.53 US cents, 78.63 Australian cents, 51.20 pence, 66.60 yen and 0.6364 euro. The Trade Weighted Index was at 73.26.

Brent crude oil was trading at $US110.10 per barrel and gold was trading at $US1726.56 per ounce