From Morrison Securities Pty. Ltd.

U.S. Stock Markets

U.S. stocks sank for a third straight day as falling commodity prices added to investor anxiety over the euro and a jump in Italy's borrowing costs.

The Dow Jones Industrial Average gave up 111 points, or 0.9%, to 11844 in afternoon trading Wednesday. The Standard & Poor's 500-stock index lost 10 points, or 0.9%, to 1215 and the Nasdaq Composite shed 36 points, or 1.4%, to 2544.

Leading the declines were energy stocks, as commodity prices fell steeply. Caterpillar declined 4.3% to lead the Dow decliners, while Chevron gave up 2.9% and Exxon Mobil fell 1.6%.

Technology stocks were also weak, with Hewlett-Packard and Cisco Systems dropping 1.8% and 3.1%, respectively. European markets finished at the day's lows, as sentiment toward Europe's single currency soured after German Chancellor Angela Merkel said Tuesday that she opposed raising the lending limit for the euro zone bailout fund.

The euro also fell below $1.30 for the first time since January. Separately, Italy sold the maximum targeted amount of five-year bonds, but was forced to pay a euro era high average yield of 6.47% to do so, above the 6.29% paid at the previous auction last month.

The country's 10-year bond yield rose back above the key 7% level, to 7.169%. Spain, Italy and France all saw their government bond yields widen over German bunds.

In corporate news, shares of Avon Products rallied 6.3% to top the S&P 500 gainers list after the beauty products company said Andrea Jung, currently the company's chairman and chief executive, will relinquish her role as CEO when a replacement is found. On the downside, First Solar tumbled 21% after the solar-panel maker cut its outlook for the year.

European Stocks
European stocks fell sharply Wednesday and the euro dropped below the psychologically key $1.30 level, as worries over Europe's sovereign-debt crisis combined with lingering disappointment over policy inaction by the U.S. Federal Reserve.

The Stoxx Europe 600 index fell 2.1% to 232.44. French stocks posted particularly steep losses, with the CAC 40 index slumping 3.3% to 2,976.17.

Among French banks, Societe Generale SA sank 8%, BNP Paribas SA fell 7.4% and Credit Agricole SA shed 6.7%. An auction of Italian five-year paper resulted in the government paying the highest yields of the euro era. In Milan, the FTSE MIB index fell 2.8% to 14,430.02, with shares of automaker Fiat SpA off 5.5%.

The biggest loser in the Stoxx 600 was Anglo-Dutch IT firm Logica PLC, whose shares sank 16.1% after the firm said it will speed up a revamp plan involving 1,300 job cuts following further weakness seen in its business since September.

Inditex SA rose 1.7% after the Spanish retailer reported a 10% gain in both net profit and sales in the nine months to Oct. 31, but it was one of the few retail gainers as the mood darkened in Europe. Shares of French retailer Carrefour SA fell 5.3%, while Germany's Metro AG dropped 3.6%.

The Ifo Institute said Wednesday that Germany's economic growth would likely slow to 0.4% in 2012, due to the sovereign-debt crisis and a weaker global economy.

The German DAX 30 index fell 1.7% to 5,675.14, with car stocks such as BMW AG and Volkswagen AG down 5.1% and 4.5%, respectively. Shares of Daimler AG fell 3.1%. Energy and mining stocks got hit hard as oil, gold and silver futures posted steep losses.

French oil giant Total SA fell 2.4%. In London, BP PLC and Royal Dutch Shell PLC dropped 2.5% and 2.2%, respectively. Among miners, Fresnillo PLC sank 9.7% and Rio Tinto PLC shed 4.7%. Those losses helped drag the resources-heavy FTSE 100 index down 2.3% to 5,366.80.

Asia-Pacific Stock Markets
Asian markets ended mostly lower Wednesday as investors found little to inspire in the U.S. Federal Reserve's policy statement and concerns about the fallout from European debt troubles kept buyers away.

Many regional markets flirted with positive territory during the session after a string of recent declines, but were unable to hold on to gains.

Japan's Nikkei Stock Average finished the day 0.4% lower at 8519.13, China's Shanghai Composite ended 0.9% lower at 2228.53, marking its fifth straight session of losses, the Hang Seng Index dropped 0.5% to 18,354.43, and South Korea's Kospi shed 0.3% to 1857.75.

Taiwan's Taiex rose 0.4% to 6922.57. Financials were mixed in Hong Kong, with shares of AIA Group Ltd. rising 0.6% and Bank of China Ltd. gaining 0.4%, while heavyweight HSBC Holdings PLC declined 1.8%.

But resource-sector stocks mostly declined in Hong Kong as well as Shanghai, tracking weak metals prices. Aluminum Corp. of China, or Chalco, shed 3%, Jiangxi Copper Co. fell 1.7% and Zhongjin Gold Corp. shed 2.4% in Shanghai; in Hong Kong, Chalco lost 3.1% and Jiangxi fell 1.4%.

In Tokyo, JFE Holdings Inc. fell 0.9% and Mitsui Mining & Smelting Co. shed 1.4%. Shares of Olympus Corp. fell 4.1% in Tokyo after the company submitted corrected earnings reports for the past five financial years, after admitting to an accounting scandal. In Japan, shares of exporters continued to weaken on the global-demand outlook, with Honda Motor Co. dropping 2.2% and Komatsu Ltd. shedding 1.3%.

Commodities
Copper closed 5.1% lower on the London Metal Exchange Wednesday after worries over Europe spurred widespread liquidation across risk assets.

Market participants largely blamed the pullback on a sharp drop in the euro, which fell below the psychologically key $1.30 level after a disappointing Italian bond auction added to fears over the euro zone's debt crisis. Copper led the base metals lower as equity markets on both sides of the Atlantic were hit. Aluminum was also closely watched as it broke to a fresh 17-month low of $1,955.75/ton.

Three-month lead closed down 4.2% at $1,998/ton. Three-month zinc meanwhile ended down 3.5% at $1,844/ton, giving lead a premium of $154/ton. Prices of crude-oil futures added to steep losses late Wednesday, falling to a more-than-a-month low below $95 a barrel on growing worries about weak oil demand in the U.S. and Europe.

Prices skidded to a fresh session low of $94.21 a barrel, the weakest level since Nov. 7, after the U.S. Energy Information Administration reported that crude-oil stocks fell by less than expected last week, and gasoline inventories rose by more than twice the expected level.

Total oil demand in the U.S., the world's biggest oil consumer, lags behind the year-earlier level by the biggest level in two-and-a-half years, the EIA data show.

The U.S. data came as oil already had fallen sharply earlier, after the dollar surged to its highest level since January against the euro and OPEC ministers agreed to keep oil output steady. Light, sweet crude oil for January delivery on the New York Mercantile Exchange settled down 5.2% at $94.95 a barrel.

Gold futures ended at their lowest level in five months as concerns about liquidity and Europe's economy flared after the euro broke below the psychologically important $1.30. Gold for February delivery settled down $76.20, or 4.6%, at $1,586.90 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the first time the most-active contract has settled below $1,600 since Sept. 26, and the lowest settlement price since July 12.