Global stocks were little changed and the euro fell today as worries over worsening economic conditions in Europe and the United States clamped down appetite for riskier investments.
Nervous investors piled back into gold, German and US government bonds and other assets perceived as safe havens.
A surprise increase in weekly US jobless claims and remarks by European Central Bank president Jean-Claude Trichet about downside risks to the euro zone's economy fuelled fears that both the United States and Europe are at risk of slipping into recession.
As global growth slows and Europe's debt crisis rages on, investors are waiting for moves from government officials and policymakers in the hope that they could provide the needed lift for the economy and investor confidence, despite doubts over their effectiveness.
Fed chairman Ben Bernanke will deliver a speech on the US economic outlook at 6.30pm to the Economic Club of Minnesota, but he is unlikely to announce any new measures to boost the economy.
US president Barack Obama will deliver a televised speech to Congress at midnight, in which he is expected to propose tax cuts for middle-class households and businesses and new spending to repair roads, bridges and other infrastructure.
Later this week, G7 finance ministers and central bankers will convene in Marseilles, France.
By the middle of the morning, the Dow Jones industrial average was down 27.81 points, or 0.24 per cent, to 11,387.05. The Standard and Poor's 500 Index fell 5.46 points, or 0.46 per cent, to 1,193.16. The Nasdaq Composite Index shed 8.18 points, or 0.32 per cent, to 2,540.76.
World stocks as measured by MSCI were up 0.1 per cent, helped by a 0.3 per cent gain of Tokyo's Nikkei. The MSCI world index has recovered somewhat from the August correction - the worst monthly loss since 2008 – but the index is 16 per cent below the 2011 highs hit in May.
The FTSEurofirst 300 index of top European shares was up 0.6 per cent, after trimming earlier gains on ECB's decision to leave key rates alone.
In the wake of ECB's decision, the euro fell to a session low of $1.3947, while benchmark 10-year German Bund yields touched a historic low of 1.82 per cent.
The yield on US 10-year Treasuries fell near 2 per cent, not far above a 60-year low.
In the precious markets market, spot gold prices jumped more than $40 at $1,859 an ounce.
Reuters
