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Wall Street takes late dive

Wall Street took a late dive after the United States government said it was starting criminal and civil investigations into the Gulf of Mexico oil spill.

The Dow Jones industrial average plunged shortly before the close of trade and minutes after Attorney General Eric Holder made the announcement.

Stocks in energy companies and oil service providers tumbled on the news, and other stocks followed. BP PLC, which operated the rig that caused the spill, fell almost 15 per cent.

Trading was choppy for much of the day before Holder's announcement, with investors juggling worries about Europe's debt problems with upbeat reports on US manufacturing and construction.

The euro slid as low as $US1.2112, its lowest level since April 2006, before climbing back to $US1.2298.

Stocks received support from two upbeat economic reports: the Commerce Department said construction spending rose by the biggest amount in nearly a decade, its 2.7 per cent April gain the largest since August 2000, after economists forecast spending would be flat.

And the Institute for Supply Management said its manufacturing index fell to 59.7 in May from 60.4 in April. The figure was better than economists' forecast of 59.

The Dow Jones Industrial Average closed down 112.61 points, or 1.11 per cent, to 10,024.02.

The tech-rich Nasdaq index fell 34.71 points, or 1.54 per cent, to 2,222.33, and the S&P 500 index slipped 18.70 points, or 1.72 per cent, to 1,070.71.

LONDON - European stocks had a mixed day amid jitters over the continent's shaky finances. Shares in BP PLC plunged 13.1 per cent, on the first of trading after the oil company's latest failed attempt to block the oil leak in the Gulf of Mexico.

London's FTSE index closed down 25.13 points, or 0.48 per cent, at 5,163.29.

FRANKFURT - Germany's DAX closed up 16.94 points, or 0.28 per cent, at 5,981.27.

PARIS - The CAC 40 index closed almost flat, down 4.48 points, or 0.13 per cent, at 3,503.08.

TOKYO - Japanese shares lost 0.58 per cent on profit-taking, with risk appetite slimmed by speculation that Japan's troubled Prime Minister Yukio Hatoyama would resign ahead of key July elections.

The headline Nikkei index of the Tokyo Stock Exchange fell 56.87 points to 9,711.83.

HONG KONG - Hong Kong and Shanghai shares tumbled after data showed manufacturing in China eased in May, indicating a slowdown in the world's third biggest economy.

The HSBC China Manufacturing PMI, or purchasing managers index, fell to an 11-month low of 52.7 last month from a revised figure of 55.2 in April, indicating the recovery of China's manufacturing sector lost some momentum.

A separate survey released by a government agency showed manufacturing activity had dropped to 53.9 in May from 55.7 in April.

Hong Kong's Hang Seng Index lost 268.24 points, or 1.36 per cent, to close at 19,496.95.

WELLINGTON - Solid sales for Restaurant Brands and a proposed merger to create a new bank failed to lift the New Zealand share market out of the red.

Fast food operator Restaurant Brands jumped three per cent after a positive quarterly sales update.

Finance services stock Pyne Gould Corp rose on news of a planned merger of its banking operations, Southern Cross Building Society and Canterbury Building Society.

The benchmark NZX-50 index lost 6.5 points, or 0.2 per cent, to close at 3,054.76.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Canterbury, Dow Jones, HSBC, Stocks, Wall Street

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