U.S. stocks fell slightly Wednesday, despite improving U.S. economic data, as investors continued to worry about euro-zone finances.

The Dow Jones Industrial Average fell 21 points, or 0.2%, to 11456, a day after the measure reached its highest close since September 2008.

General Electric led the measure's decline with a 1.5% drop, while J.P. Morgan fell 1.3% and Alcoa slipped 1.1%.

The Nasdaq Composite lost 0.5% to 2615.

The Standard & Poor's 500 stock index shed 0.5% to 1235.

The euro slipped to $1.3234 from $1.3381 late Tuesday, after Moody's Investors Service said it may downgrade its ratings on Spanish government debt and Standard and Poor's Ratings Services lowered its ratings outlook on Belgium to negative from stable.

The warnings added to investors' worries over the euro zone even as U.S. data showed New York manufacturing activity roared ahead this month after contracting in November, while U.S. industrial production staged a modest rebound in November following a brief drop.

Capacity utilization bounced back as well.

In issuing its warning on Spain, Moody's cited the country's challenging refinancing needs next year and a complicated outlook for the country's banks and regional governments.

The lowered outlook from S&P on Belgium came as the ratings agency warned that if the country fails to form a government within six months, it could possibly face a one-notch downgrade.

Also in the euro zone, German Chancellor Angela Merkel said European leaders will approve a permanent facility to rescue financially stressed governments Thursday, but again opposed a plan for collective government debt issuance.

Irish lawmakers voted Wednesday to accept EUR67.5 billion in loans from the European Union and International Monetary Fund as part of a EUR85 billion package to shore up Ireland's banks and public finances.

In the U.S., Senate lawmakers approved an $858 billion bill extending the Bush-era tax cuts for two years, turning the spotlight on House lawmakers to pass the sweeping legislation.

The Senate voted 81-19 to approve the tax measure.

Among stocks in focus, U.S. shares of Novartis climbed 5.6%.

The company paved the way to take full control of Alcon after sweetening its original share offer with a cash component, ending a drawn out battle to acquire the remaining 23% of the U.S. eye care company it doesn't own for a total value of $12.9 billion.

Alcon added 1.7%. Goldman Sachs fell 1.2% and Morgan Stanley shed 1.9% after some Wall Street analysts cut fourth quarter earnings estimates on the investment banks, citing lower than expected trading volumes in fixed income, currencies, and commodities.

European Markets

Spain led a broad decline for European markets after Moody's Investors Service warned Wednesday it may downgrade the country's credit rating, while shares of Novartis AG and Atos Origin SA rallied on deal news.

The Stoxx Europe 600 index dropped 0.4% to close at 276.53, ending a seven session streak of gains.

The benchmark had risen Tuesday to its highest closing value since September 2008.

Among the bigger European markets, the French CAC 40 index dropped 0.6% to 3,880.19 Wednesday.

The German DAX 30 index slipped 0.2% to 7,016.37, while the U.K.'s FTSE 100 index was also down 0.2%, at 5,882.18.

In Madrid, the IBEX 35 index fell 1.5% to end at 10,009.80, recovering slightly from an intraday low of 9,944.60.

Shares of Spanish banking giant Banco Santander SA slumped 2.6% and rival BBVA SA fell 2%.

Barclays PLC, which has significant exposure to Spanish debt, sank 3.7% in London, while Deutsche Bank retreated 1.7% in Frankfurt.

Asian Markets

Asian stock markets were mostly lower Wednesday, with shares in Japan weighed on by a report showing a weak outlook for the country's manufacturing sector.

Japan's Nikkei Stock Average was flat and South Korea's Kospi Composite was down 0.1% at 2007.65.

The Shanghai Composite Index was down 0.3%, while Hong Kong's Hang Seng Index lost 0.6% and Taiwan's main index fell 0.1%.

Trading volumes were generally thin across the region, suggesting that the selling pressure was mild, while losses were limited by Wednesday's gains on Wall Street and strong U.S. retail sales data.

Some market watchers said the rise in U.S. Treasury yields suggested investments will increasingly shift into riskier assets.

The Bank of Japan's tankan survey for December weighed on the Tokyo market.

The survey showed that sentiment among big manufacturers deteriorated for the first time in seven quarters, although the outcome was slightly better than economists' expectations.

Toyota Motors was up 1.1%, while Sony was off 0.4% and Sharp fell 1.2%.

The Shanghai market traded in a tight range as the year winds to a close, with some property and construction related stocks falling on profit-taking after their recent gains.

China Vanke fell 1.4%, Poly Real Estate lost 2.5% and Anhui Conch Cement was down 2.3%.

Base Metals

Copper closed lower on the London Metal Exchange Wednesday as the metal markets slumped under pressure from a stronger U.S. dollar.

The LME's three-month copper contract closed at $9,095 a metric ton, down 0.8% on Tuesday's PM kerb.

Other base metals also mostly ended the day in the red, as did the precious complex.

Figures from the World Bureau of Metal Statistics failed to support the red metal, showing a 68,000 ton surplus in the global refined copper market in January through October.

While the oversupply was relatively small compared with some other markets, such as aluminum and zinc, the market had been in a 112,000 ton deficit in the first nine months of the year.

Crude futures turned higher Wednesday after U.S. oil stockpiles posted their biggest weekly decline in eight years.

Crude inventories fell by 9.9 million barrels in the week ended Dec. 10, according to a report from the U.S. Department of Energy, a much larger drop than the 2.7-million barrel decline analysts had expected.

Total U.S. crude and fuel stockpiles fell to the lowest level since November 2008, due in part to a sizable drop in imports.

Light, sweet crude for January delivery settled 34 cents higher at $88.62 a barrel on the New York Mercantile Exchange after trading as low as $86.83 earlier in the session.

Investors shed safe harbor purchases of gold as upbeat economic data and slower than expected inflation stoked risk appetite.

The most actively traded contract, for February delivery, settled down 1.3%, or $18.10, at $1,386.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

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