Gold surges, stocks fall on new Europe worries
European stocks fell late in the session after a meeting of European Union finance ministers set for Wednesday was canceled. Yet authorities said the planned meeting of EU heads of state would proceed.
The EU leaders’ summit has been expected to produce the framework for bolstering the continent’s banks and boosting the firepower of the $600-billion rescue fund for Eurozone member states.
Herman Van Rompuy, the European Council president, sought to downplay the cancellation of the finance ministers’ meeting, telling Reuters that the ministers “may meet in the coming days to fine-tune decisions that will be taken tomorrow.”
The euro currency isn’t showing any signs of panic: The euro was trading at $1.393 at about 11 a.m. PDT, up slightly from Monday.
But some investors and traders rushed into gold, the classic haven. Near-term gold futures in New York jumped $49.30 to $1,700.80 an ounce, the first move above $1,700 since Sept. 22.
European stock markets were mostly down between 1% and 1.5%, relatively modest losses.
On Wall Street, stocks also were lower after rallying Monday to their highest levels since early August. The Dow Jones industrial average was off 131 points, or 1.1%, to 11,781 at about 11 a.m. PDT.
[Updated at 1 p.m. PDT: The Dow ended the session down 207 points, or 1.7%, to 11,706, after three straight daily gains.]
The U.S. market also was weighed down by the latest dismal report on consumer confidence.
— Tom Petruno
Photo: The European Union flag flying near the Parthenon in Greece, the epicenter of Europe's two-year-old debt crisis. Credit: Petros Giannakouris / Associated Press