U.S. stocks wavered between small gains and losses Tuesday as investors tried to reconcile continued worries over the European sovereign debt crisis with encouraging data on U.S. manufacturing and consumer confidence. The Dow Jones Industrial Average was down 0.1% at 11040.84, in recent trading. Caterpillar rose 1.3%, boosted by a better than expected reading on Chicago area manufacturing.

Consumer stocks also rose, with Walt Disney up 1% and Wal-Mart Stores up 1%, after the Conference Board's measure of consumer confidence topped estimates. The blue chip measure is on pace to end November in negative territory, in what would mark its first down month since August. The Nasdaq Composite Index was down 0.9% at 2503.24, hurt by a 3.5% drop in Google following reports that the online-search giant is offering to buy Groupon, a social network site geared toward discount shoppers, in a deal worth $6 billion. Separately, the European Commission opened an antitrust investigation into allegations that Google has abused a dominant position in online search.

The Standard & Poor's 500 stock index slipped 0.3% to 1184.59, with its technology sector leading to the downside while materials and consumer-discretionary stocks climbed. Investors were encouraged by the Chicago Purchasing Managers' Index, which came in at 62.5 in November, better than the 60.0 reading economists were expecting. In addition, the Conference Board's November reading of consumer confidence came in at 54.1, better than the mean economists' forecast of 52.5. Meanwhile, investors continue to fret that Europe's sovereign-debt crisis could widen to Portugal, Spain or Italy. The premium demanded by investors to hold 10 year Spanish bonds over German bunds hit more than three full percentage points, the largest gap since the launch of the euro.

European markets

European shares dropped again Tuesday as sovereign-debt worries continued to wash across the continent, with banks in particular falling hard as yields on Spanish and Italian debt soared. The Stoxx Europe 600 index was lower for a third straight session, falling 0.1% to end at 261.83. The index pared its losses after better than expected data on U.S. consumer confidence and manufacturing activity in the Chicago area. The U.K.'s FTSE 100 index fell 0.4% to 5,528.27, the German DAX 30 index slipped 0.1% to 6,688.49, and the French CAC 40 index dropped 0.7% to 3,610.44.

Banks and insurers were among the biggest decliners as investors worried about the potential need for more bailouts and the possibility of future defaults. Shares in BNP Paribas slumped 3.4% in Paris, Barclays PLC fell 2.6% in London, and UniCredit tumbled 3.4% in Milan. Among the peripheral markets, Italy's FTSE MIB index fell 1.1%, Spain's IBEX 35 dropped 0.6%, and Portugal's PSI 20 was 1.3% lower. The yield on 10 year Spanish government bonds jumped to 5.63% Tuesday from 5.43%. Other countries are also being dragged deeper into the crisis, with Italian and Belgian bond yields continuing to climb.

Asian markets

Asian stock markets ended mostly lower Tuesday as concerns about further tightening measures in China weighed on shares on the mainland and in Hong Kong, while Tokyo stocks were also hit by caution over European sovereign debt. Regional sentiment was hurt by continuing worries over euro-zone debt woes. Despite Sunday's announcement of a EUR85 billion bailout package for Ireland, worries remained as to whether Portugal or Spain will also need help refinancing their debt.

China's Shanghai Composite Index slid 1.6% to finish at 2820.18, a seven-week low, and Japan's Nikkei Stock Average fell 1.9% to 9,937.04, its weakest close since Nov. 17. Hong Kong's Hang Seng Index closed down 0.7%, while South Korea's Kospi Composite ended 0.5% higher. China's shares slid for the third straight session, weighing on Hong Kong's market, on concerns about further monetary tightening measures after officials continued to stress on the need to curb inflation. Interest rate sensitive plays, such as banks and property developers, extended recent losses, with China Merchants Bank's Shanghai shares falling 1.7% and its Hong Kong ones losing 2.0%. Poly Real Estate Group declined 1.3% in Shanghai and Hong Kong listed China Resources Land lost 1.4%.

Base metals

Base metals on the London Stock Exchange jumped in European trading following better than expected macro economic data from the U.S. and end of the month portfolio readjustments, market participants said Tuesday. Some investors are buying into a recent dip in LME base metal prices from November highs, he said, while others are taking their cue from the positive U.S. economic sentiment data. A London based trader agreed, noting investors are doing a bit of window dressing before the month ends.

A London based metals trader said copper's move above its 10-day moving average triggered other investors to to jump into the other metals. At one point nickel was leading the gains, up more than 3%, while zinc rose more than 2.7% and lead was up more than 2.4%. Crude futures turned lower Tuesday, stung by renewed worries about Europe's sovereign debt and a strengthening dollar, and ahead of key inventory data. Light, sweet crude for January delivery settled $1.62 lower at $84.11 a barrel on the New York Mercantile Exchange.

Gold futures rallied as China moved to spur more investment in the metal at a time when investors are clamoring for it as a refuge. The most actively traded contract, for February delivery, gained $18.60, or 1.4%, to settle at $1,386.10 an ounce on the Comex division of the New York Mercantile Exchange.

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