NEW YORK – The stock market appeared headed Tuesday for its best January finish in more than a decade. An unexpected drop in consumer confidence dragged stocks down on the final day.

The Dow Jones industrial average was down 22 points at 12,631 just after 3 p.m. EST. The Standard & Poor’s 500 was down less than a point at 1,312. The Nasdaq composite index was up three at 2,814.

For the month, the S&P 500 is up 4.3 percent. That would be its best performance to start a year since a 6.1 percent gain in January 1997. Last year, the market added 2.3 percent in the first month.

Investors had such low expectations for the economy that it was easy for reports in January to come in better than expected, said Jerry Harris, chief investment strategist at the brokerage Sterne Agee.

But the news has mostly been good. Unemployment has fallen from a 10 percent peak in October 2009 to 8.5 percent, and the economy grew at a faster clip each quarter last year.

“I don’t see anything really glamorous or tremendous about the economy or earnings,” Harris said. “But I think they’re very acceptable, and things are grinding along.”

The Dow closed at 12,217.56 at the end of last year, then started this year with a pop — a gain of 179.82 points on opening day. It was the kind of big swing investors became accustomed to in 2011.

Since then, it’s been a quiet ascent: 19 days in a row of moves of less than 100 points. The last time the Dow had such a placid stretch was a 34-day run that started Dec. 3, 2010.

“Companies are reporting barely any increases in revenues and are just barely beating earnings forecasts. There are no big surprises,” said Kim Caughey Forrest, a senior equity analyst at money manager Fort Capital Group. “That’s the kind of ho-hum economy that we are in right now.”

On Tuesday, the Dow started up 66 points after encouraging signs from Europe that Greece might finally complete a deal to cut its crushing debt, a step toward securing a critical euro130 billion bailout payment.

Greece is negotiating with investors who bought its government bonds. They are expected to swap their bonds for new ones with half the face value, plus a lower interest rate and longer term of maturity.

Investors are increasingly worried that Portugal may need a similar deal with its private creditors. European leaders insist the Greek reduction is a one-time event. Portugal’s borrowing costs have risen to record highs.

The Dow lost its gains after the Conference Board reported that its consumer confidence index fell to 61.1 in January, down from 64.8 in December. Economists had expected 68.

There were also signs that the housing market continues to struggle. Home prices fell in November for a third straight month in in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The biggest declines were in Atlanta, Chicago and Detroit.

Six of the 10 major categories in the S&P 500 were lower for the day. Telecommunications stocks, financial stocks, utilities and information technology stocks managed small gains.

Avery Dennison Corp., which makes labels and packaging materials, was the worst performer in the S&P, down 5.7 percent, after it said earnings plunged 81 percent on nearly flat sales. Its 2012 outlook was well below Wall Street expectations.

In the bond market, the weak U.S. economic data and uncertainty about Greece lit up demand for safe investments. The benchmark 10-year Treasury yield dipped below its lowest closing level in nearly four months.

The yield on the five-year Treasury note hit a record low for the second straight day, falling to 0.71 percent.

Treasury yields have been falling since last week, when the Federal Reserve said it expected to hold interest rates near zero into late 2014, more than a year longer than its last estimate, because the economic recovery will need help.

RadioShack Corp. stock plummeted 28 percent after the company said its profit fell sharply — 11 cents to 13 cents per share for the quarter that ended in December, down from 51 cents a year earlier and less than half what Wall Street was expecting.

Best Buy Co. Inc., one of RadioShack’s competitors, responded by falling 5.2 percent, among the S&P worst. Both companies sell and service cellphones, but demand has softened at their stores.

Among other stocks in the news:

• Mattel Inc. soared 5.2 percent because of strong demand for Barbie and Monster High dolls during the holidays. That boosted Mattel’s fourth-quarter profit by a better-than-expected 14 percent. The company also raised its dividend.

• U.S. Steel Corp. gained 4 percent after it reported strong demand for pipes from the oil industry from October through December. The company was also optimistic about this quarter.

• Agriculture conglomerate Archer Daniels Midland declined 4.6 percent after it reported an 89 percent drop in quarterly net income. The company said its results were weighed down by weakness in oilseeds, corn processing and agricultural services.

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AP Business Writer Stan Choe contributed to this report.

NEW YORK – Stocks dropped and yields for ultra-safe U.S. government debt fell to their lowest level this year Monday while financial markets around the world waited for Greece to nail down a deal to reduce its crushing debt.

Greece and the investors who bought its national bonds were close to a deal over the weekend. The investors would swap their bonds for replacements with half the face value.

Greece needs the deal to secure a crucial installment of bailout loans and avoid missing an upcoming bond payment. But the deal has been in the works for weeks and could still fall apart.

The Dow Jones industrial average was down 72 points to 12,588 as of just before 1 p.m. EST, a drop of 0.6 percent. Financial stocks were the worst performers in the broader market, with Bank of America down 3.3 percent.

Borrowing costs for European countries with the largest debt burdens shot higher. The two-year interest rate for Portugal’s government debt jumped to 21 percent from 14 percent last week.

U.S. Treasury yields sank to their lowest level this year as traders parked cash in the safest assets. The yield on the 10-year Treasury sank to 1.83 percent. It was trading above 2 percent just last week.

The euro dropped 0.6 percent against the dollar, and European stocks sank. French and Spanish stocks closed down 1.6 percent, Italian stocks down 1.2 percent and German stocks down 1 percent.

The focus on Greece has shifted attention away from what’s going well in the U.S., said Jack Ablin, chief investment officer at Harris Private Bank. Companies have reported stronger quarterly earnings, and hiring has picked up.

“Our collective breath has been held for so many months,” Ablin said.

While the market is waiting on an agreement to cut Greece’s debt and contain a wider European debt crisis, even a messy default could eventually lead to a stronger U.S. stock market, he said.

“If it finally happens and the world doesn’t fall apart, maybe we’ll have a reason to take risk again,” he said. “Once you pull off the Band-Aid, it feels better.”

An agreement between Greece and its creditors could serve as a blueprint for other European countries with heavy debt burdens. Dan Greenhaus, chief global strategist at BTIG, pointed to Portugal’s soaring bond yields in a note to clients.

“At this rate, Portugal is going to move from the back to front burner in very, very short order,” he said.

European leaders are also gathering in Brussels, focusing on how to stimulate economic growth when huge government spending cuts threaten to push many countries back into recession.

The latest data showed Spain’s economy shrank in the last three months of 2011.

In other trading in the United States, the broader Standard & Poor’s 500 index fell nine points, or 0.7 percent, to 1,307. The Nasdaq composite lost 12 points, or 0.4 percent, to 2,804.

The Commerce Department said Americans’ income rose in December by the most in nine months. That’s slightly better than what economists expected.

Among stocks making big moves Friday:

• The fast food chain Wendy’s dropped 2 percent. The Wendy’s Co. said Monday that a key measure of earnings dropped 30 percent in the fourth quarter. Charges for selling Arby’s offset the effects of a jump in sales.

• PharMerica Corp. plunged 12 percent. The Federal Trade Commission said it was suing to block rival pharmacy company Omnicare Inc. from completing its $457 million takeover of PharMerica. The agency said a merger of the country’s two largest long-term care pharmacies would raise the cost of Medicare prescription plans covering drugs for nursing home residents. Stock in Omnicare Inc. inched up less than 1 percent.

• Thomas & Betts Corp. soared 22 percent on news that Swiss engineering group ABB Ltd. agreed to buy the maker of power lines and other electrical products for $3.9 billion in cash.

BANGKOK – Asian stock markets rose, focused on expectations that China will loosen its monetary policy to boost growth. But European shares slid in early trading as the continent’s debt crisis once again moved to the forefront.

Benchmark oil hovered near $101 per barrel while the dollar fell against the euro and the yen.

Britain’s FTSE 100 fell 0.6 percent to 5,662.19. Germany’s DAX slipped 0.5 percent to 6,304.31 and France’s CAC-40 shed 0.6 percent to 3,250.74. On Wall Street, Dow Jones industrial futures fell 0.1 percent to 12,403 while S&P 500 futures lost 0.2 percent at 1,287.40.

Investor were jittery over Greece, which is running out of time to avoid becoming the first country that uses the euro to default on its debts and potentially trigger a chain reaction that could ultimately destabilize the global economy.

Athens was to resume negotiations later Wednesday with the Institute of International Finance, which represents bondholders. Talks stalled on Friday after disagreement erupted over the terms of new bonds that Greece would issue to replace expiring bonds that it cannot afford to pay off.

Asian stocks fared better amid confidence in the Chinese economy.

Japan’s Nikkei 225 index rose 1 percent to close at 8,550.58. Hong Kong’s Hang Seng added 0.3 percent to 19,686.92. South Korea’s Kospi was nearly unchanged at 1,892.39, while Australia’s S&P/ASX 200 was up slightly at 4,217.90. Benchmarks in Taiwan, Indonesia and Malaysia also rose.

Mainland Chinese shares fell on profit-taking after a brisk day of trade Tuesday that saw the biggest gains in 27 months. The Shanghai Composite Index lost 1.4 percent to 2,266.38, while the Shenzhen Composite Index dropped 2.7 percent to 837.40.

Investors cheered news out of China on Tuesday when the government said its economy slowed less dramatically in the fourth quarter than feared — but still enough of a slowdown to persuade investors that Beijing will pursue a pro-growth monetary policy, analysts said.

“People have been buying stocks in anticipation of a relaxation in monetary policy by the Chinese government,” said Derek Cheung, chief investment officer at Neutron INV Partners Ltd. in Hong Kong. “The market expects this around Chinese New Year. If China doesn’t loosen around the new year, the market may come under pressure.” The holiday begins Jan. 23.

China is one of the biggest importers and slower growth could have global repercussions if it cuts demand for iron ore, industrial components and other goods from Australia, Brazil, Southeast Asia and elsewhere.

It would also mean less demand for U.S. and European capital goods for Chinese factories and construction sites, and smaller profits for U.S. and European companies that do business in China. The luxury goods industry would also feel a significant pinch, since China is just about its only growth market.

Commodity shares jumped on the growth data out of China. In Australia, miners Fortescue Metals Group soared 5.2 percent and Rio Tinto Ltd. added 1.4 percent after both companies reported target-beating production figures.

But financial shares came under pressure on weak quarterly earnings from some U.S. banks, including Citigroup Inc., which said its fourth-quarter income fell 11 percent due in part to lower investment banking income and an accounting charge.

Australia & New Zealand Banking Group fell 1.2 percent and Hong Kong-listed Agricultural Bank of China lost 1.6 percent.

South Korean high-tech shares lost ground. Samsung Electronics Co., the top global manufacturer of flat screen televisions, memory chips and liquid crystal displays, fell 0.6 percent. LG Electronics shed 1.5 percent, and Hynix Semiconductor was 1.2 percent lower.

Benchmark crude for February delivery was up 8 cents to $100.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract finished at $100.71 per barrel in New York on Tuesday.

In currency trading, the euro rose to $1.2755 from $1.2722 late Tuesday in New York. The dollar fell to 76.68 yen from 76.82 yen.

FIRST UP: A rare disappointing earnings report from JPMorgan Chase, the country’s largest bank, battered bank stocks and pushed the market lower. Among traders, the thinking was that if JPMorgan had trouble in the final quarter of 2011, the rest of the industry probably did, too.

GALLIC SHRUG: Markets were little changed after France’s finance minister confirmed that S&P had stripped the country of its AAA credit rating. The markets have been expecting a downgrade for months.

NOT BAD SO FAR: Even with Friday’s fall, the three major indexes posted gains for the second straight week. The S&P 500 index is up 2.5 percent to start the year.

BANGKOK – Asian stock markets fell Friday as signs of financial stress emerged in Italy and Hungary, but European shares turned higher as attention turned to the impeding release of monthly jobs data showing gains in U.S. employment.

Benchmark oil stood above $102 per barrel while the dollar fell against the euro and remained steady with the yen.

Stocks on European bourses rose ahead of the release of data showing that the U.S. job market was strengthening. Analysts are projecting hiring gains when the U.S. Labor Department issues the December jobs report. That would mark a six-month stretch in which the economy generated 100,000 jobs or more in each month.

Britain’s FTSE 100 rose 0.2 percent at 5,636.12. Germany’s DAX rose 0.5 percent to 6,123.20. France’s CAC-40 rose 0.7 percent to 3,167.75. Ahead of the opening bell on Wall Street, Dow Jones futures rose 0.1 percent to 12,345 and S&P 500 futures gained slightly to 1,274.

Asian indexes ended mostly lower amid worries over the health of Europe’s banks and fears that the continent’s debt crisis might be spreading beyond a handful of small economies.

Japan’s Nikkei 225 Index closed 1.2 percent lower at 8,390.35. Hong Kong’s Hang Seng index fell 1.2 percent at 18,593.06. South Korea’s Kospi fell 1.1 percent to 1,843.14. Benchmarks in Taiwan and Indonesia also fell. India and Singapore rose.

In mainland China, the benchmark Shanghai Composite Index gained 0.7 percent to 2,163.39, while the smaller Shenzhen Composite Index gained 0.5 percent to 817.78. Shares in cement, steel, nonferrous metals, coal mining and securities companies led gains.

Developments on Thursday magnified fears that Europe’s debt crisis — which dominated so many of 2011′s financial headlines — was flaring anew.

Trading in UniCredit, Italy’s largest bank, was halted after the stock lost a quarter of its value. The bank said Wednesday that it would need to offer huge discounts to investors to raise money in a new share sale.

Hungary, meanwhile, had to pay a staggeringly high interest rate of 10 percent on its 12-month debt. That is far above the 7 percent level that forced Greece and Portugal to seek emergency bailouts to prevent them from defaulting on their debts. The development hurt investment confidence, analysts said.

“We are trading on that sentiment today,” said Jackson Wong, vice president at Tanrich Securities in Hong Kong. “Europe is still the main drag on the market. People want to take some profits off the table.”

Chinese building and property shares slumped. Hong Kong-listed Anhui Conch Cement Co. plummeted 5 percent, while China Resources Cement Holdings Ltd. dropped 5.3 percent. China National Building Material Co. lost 5.8 percent.

Chinese developers have been hurt by government lending and investment curbs imposed to rein in surging housing costs. A private research firm reported Wednesday that housing sale prices fell in December for a fourth straight month.

Japanese export shares were also hurt as the euro currency plunged against the yen. A strong yen cuts into repatriated profits and makes Japanese products more expensive overseas. Yamaha Motor Co. fell 3.3 percent while Nissan Motor Co. fell 2.2 percent. Sony Corp. lost 2 percent.

At a news conference in Tokyo, Japanese Finance Minister Jun Azumi expressed concern about the euro’s weakness against the yen.

“I am carefully monitoring the market. It is also important to monitor the movements from a long-term perspective.”

The euro’s weakness — and yen’s strength — could have a “considerable impact” on Japan’s exporters, he said.

Benchmark oil for February delivery rose 42 cents to $102.23 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell by $1.41 to end Thursday at $101.81 in New York.

In currency trading, the euro rose to $1.2805 from $1.2782 late Thursday in New York. The dollar was steady at 77.18 yen.

BANGKOK – Asian stock markets faltered Friday amid worries over the health of Europe’s banks and fears that the continent’s debt crisis might be spreading beyond a handful of small economies.

Japan’s Nikkei 225 Index fell 1 percent to 8,401.32. Hong Kong’s Hang Seng index fell 1.4 percent at 18,556.38. South Korea’s Kospi fell 1.6 percent to 1,834.70.

Benchmarks in mainland China, Singapore, Taiwan and Indonesia also fell.

Investment sentiment soured Thursday after Europe — which dominated so many of 2011′s financial headlines — became a concern again.

Trading in UniCredit, a large Italian bank, was halted after the stock lost a quarter of its value. The bank said Wednesday that it would need to offer huge discounts to investors to raise money.

And a financial crisis deepened in Hungary, which had to pay a staggeringly high interest rate of 10 percent on its 12-month debt. That is far above the 7 percent level that forced Greece and Portugal to seek bailouts.

Taken together, the news raised fears that Europe’s debt crisis would spread from small countries such as Greece and infect much larger ones such as Italy that are too big to be bailed out.

In the U.S. on Thursday, investors were encouraged by a report on the U.S. job market. Weekly unemployment claims declined again, one day before a crucial report on the national jobs picture in December.

The Dow Jones Industrial Average had a tiny decline to end at 12,415.70. The Standard & Poor’s 500 index rose 0.3 percent to close at 1,281.06. The tech-heavy Nasdaq rose 2.5 percent to 2,669.86.

Benchmark oil for February delivery fell 40 cents to $101.38 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell by $1.41 to end Thursday at $101.81 in New York.

In currency trading, the euro rose to $1.2795 from $1.2782 late Thursday in New York. The dollar was steady at 77.18 yen.

Stocks fell slightly on Wednesday following declines in Europe as the euro weakened against the dollar.

The Dow Jones industrial average fell 58 points, or a half-percent, to 12,339 in morning trading, giving back some of its surge of nearly 180 points the day before.

Banks and technology companies fell the most. Bank of America Corp. and American Express Co. were the biggest losers among the 30 stocks in the Dow average with declines of 2.5 percent and 1.4 percent.

The Standard & Poor’s 500 index fell 8.8 points, or 0.7 percent, to 1,268, and the Nasdaq fell 21 points, or 0.8 percent, to 2,627.

Fallen photography pioneer Eastman Kodak Co. lost 2 cents to 64 cents after the company said its stock could be delisted from the New York Stock Exchange if it doesn’t rise above $1 in the next six months. Phone equipment maker Acme Packet Inc. plunged almost 20 percent after saying its quarterly profit and revenue would be well below analyst expectations.

Yahoo Inc. fell 2 percent after it named Scott Thompson, president of eBay Inc.’s PayPal division, as its new CEO. Yahoo has been without a permanent CEO since firing Carol Bartz in September. The company’s board lost patience with her attempts to turn around the struggling Internet company during her 2 1/2 years on the job.

European markets fell after the euro weakened to $1.29 versus the dollar from $1.30 the day before. Another increase in Italy’s long-term borrowing rates renewed worries about Europe’s flailing efforts to restore investors’ confidence in the region’s governments.

Germany’s DAX fell 1 percent, while the CAC-40 in France fell 1.3 percent. The FTSE 100 index of leading British stocks was down 0.6 percent.

The Commerce Department said orders to U.S. factories rose 1.8 percent in November on strong demand for airplanes. However, demand for so-called core capital goods such as computers and electronic equipment dropped 1.2 percent in November, their second monthly decline in a row. The category is closely watched because it signals business investment. Network gear-maker Cisco Systems Inc. fell 1.2 percent, although Microsoft Corp. and Intel Corp. both rose.

Retailers were among the few industries to rise after a trade group for malls said sales rose 5.3 percent in the last week of December because of strong after-Christmas shopping. Lowe’s Cos. rose 1.5 percent and Ross Stores Inc. rose 2.3 percent.

Ford Motor Co. rose 1.9 percent after the auto maker said last year’s sales jumped 11 percent because of strong demand for trucks and SUVs. December sales rose 10 percent.

Chrysler, owned by Italy’s Fiat, said sales rose 26 percent for the year and 37 percent in January. Analysts have been expecting December to be a strong sales month for the U.S. auto business as confidence in the economy unlocks pent-up demand.

U.S. stocks opened the year with a bang on Tuesday. The Dow and S&P 500 each rose 1.5 percent after a measure of U.S. manufacturing expanded at the fastest rate in six months.

BANGKOK – Major stock indexes in South Korea and Taiwan fell Monday, while most other major Asian stock markets were closed for an extended New Year’s holiday.

South Korea’s Kospi, which lost 11 percent of its value last year, was marginally lower at 1,825.37. Financials led the decline, Yonhap News reported, with Woori Finance Holdings losing 1.9 percent and Shinhan Financial Group dropping 2.1 percent.

The technology sector move higher, with Samsung Electronics up 1.3 percent and LG Electronics gaining 2.8 percent. Acer Inc. lost 1.4 percent.

Taiwan’s TAIEX, which was also open for business Monday, fell 0.8 percent to 7,018.30. Foxconn Technology, the world’s biggest contract electronics manufacturer, which makes iPads and iPhones for Apple Inc., fell 1 percent. Personal computer maker Acer Inc. shed 1.3 percent.

The Asian-Pacific region’s major benchmarks, including Japan’s Nikkei 225 index, Hong Kong’s Hang Seng Index and Australia’s S&P ASX 200, were closed.

Last year was one that traders would prefer to forget: most Asian equity indexes closed out 2011 deeply in the red. The Nikkei in Tokyo ended the year at 8,429.45 — its lowest closing since 1982.

China’s benchmark Shanghai Composite Index, closed Monday, endured a 21 percent loss for the year as the impact of Beijing’s multibillion-dollar stimulus faded and the government tightened curbs on lending and investment to cool blistering economic growth.

Hong Kong’s Hang Seng Index finished at 18,434.39 — a precipitous slide of 19.7 percent from a year ago. Singapore’s Straits Times Index took a 17.5 percent dive when it closed at 2,646.35 on Friday.

Australia’s benchmark S&P ASX 200 ended the year at 4,140.4 — 14.5 percent lower for 2011.

LONDON – Stock markets around the world were closing out 2011 on a subdued note Friday, with many of the world’s major indexes posting big declines for the year in the wake of Europe’s debt crisis, a faltering U.S. economy and signs that China’s economy is no longer sizzling.

Markets have also been rocked by natural disasters, trading scandals, political upheavals, sharp fluctuations in commodity prices, and the up-and-down price of oil amid the turmoil in the Arab world.

In Europe, the trading backdrop has been particularly grim, with many of the main markets poised to post their worst year since 2008. That’s perhaps unsurprising given that most of the attention of the financial world has centered on the debt crisis, which has already seen three relatively small countries bailed out and is threatening much-bigger Italy.

Trading in Europe on Friday was fairly quiet with many traders using the opportunity to close out their books for the year. The FTSE 100 index of leading British shares was down 0.2 percent at 5,556, while Germany’s rose 0.3 percent at 5,868. The CAC-40 in France was 0.3 percent higher at 3,136.

With policymakers failing to convince markets that they can deal with the crisis and the eurozone widely-predicted to slip back into recession next year, the euro is ending 2011 softly around the $1.2934 mark after falling to a 15-month low against the dollar on Thursday at $1.2857. The euro started the year at $1.3345.

Wall Street was expecting a flat opening. As things stand, U.S. markets are going to record modest gains for the year, largely on the back of a year-end run following stronger than anticipated U.S. economic data.

Though the performance of the U.S. economy has played second fiddle to Europe for much of the year, it has the potential for shoring up confidence in 2012 if the recent positive news continues.

“Crystal ball-gazing can begin in earnest over the weekend but I am tempted to conclude — more of the same in Europe, easier policy in China, and further asset reflation in the U.S., which finally gets life back into the housing market and thereby drives optimism about the 2013 economic outlook,” said Sebastien Galy, an analyst at Societe Generale.

Asian markets have already closed out the year and most markets had a year to forget. Japan’s Nikkei 225 index, after three straight days of losses, managed to eke out a 0.4 percent rise Friday to end the year at 8,429.45. However, that was its lowest closing since 1982.

Meanwhile, China’s benchmark gained 1.2 percent to close at 2,199.42 — still, a 21 percent loss for the year as the impact of Beijing’s multibillion-dollar stimulus faded and the government tightened curbs on lending and investment to cool blistering economic growth.

Elsewhere in Asia, Hong Kong’s Hang Seng Index gained 0.2 percent to close at 18,434.39 — a precipitous slide of 19.7 percent from a year ago. Singapore’s Straits Times Index closed down 1 percent at 2,646.35 — a 17.5 percent dive.

Australia’s benchmark S&P ASX 200 ended the year at 4,140.4 — down 0.4 percent on the day and 14.5 percent lower for 2011. A day earlier, South Korea’s benchmark Kospi closed at 1,825.74 on Thursday — 11 percent down on its last trading session of the year Thursday.

Oil prices meanwhile were poised to close out the year around the $100 a barrel mark — benchmark crude for February delivery was up 30 cents at $99.95 a barrel in electronic trading on the New York Mercantile Exchange.

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Pamela Sampson in Bangkok contributed to this report.

BANGKOK – Asian stock markets were mostly lower Thursday amid new signs of pressure on Europe’s banking system and a downturn on Wall Street.

Benchmark oil lingered above $99 per barrel while the dollar rose against the euro but fell against the yen.

Japan’s Nikkei 225 index fell 0.7 percent to 8,367.73. Hong Kong’s Hang Seng Index was 0.9 percent lower at 18,349.90. Australia’s S&P ASX 200 fell 0.6 percent to 4,064.20. Benchmarks in India and Indonesia were also lower.

But South Korea’s Kospi reversed earlier losses and gained 0.1 percent to 1,827.17. Benchmarks in Singapore and Taiwan also rose after a lower opening. Shares in mainland China and Malaysia were also higher. Overall, stock markets were quieter than normal as many traders go on vacation the week between Christmas and New Year’s.

Investor sentiment waned hours after the European Central Bank said banks had parked $590.72 billion with it overnight, surpassing the record set only Monday. That means European banks were less willing to take the risk of making short-term loans to each other, opting instead to earn low interest rates from the ECB — with money lent by the central bank itself.

Francis Lun, managing director of Lyncean Holdings in Hong Kong, said the action on the part of the banks “defeated the purpose” of the ECB lending operation, which was to spur business activity.

“Investors are disappointed at the development,” Lun said. “Europe still has not found an answer on how to solve its sovereign debt crisis. There’s no solution, and they are trying cosmetic measures, which really do not address the problem.”

The development also shook confidence in the euro, which on Wednesday dropped to $1.2910 — its lowest level against the dollar in nearly a year — before recovering slightly.

“As we have seen time and time again throughout 2011, when EUR/USD falls, so does equities, and so does gold, with traders buying into fixed income assets,” Chris Weston of IG Markets in Melbourne wrote in a research note.

Even successful bond auctions in Italy failed to lift the euro against the dollar. Demand for Italian bonds was strong Wednesday, and the country was able to pay lower interest rates.

Meanwhile, the yen’s rise to a 10-year high against the euro put stress on Japan’s exporters. Kyodo News agency said the euro briefly fell to 100.35 yen in Tokyo, its lowest level against the Japanese currency since June 2001.

Honda Motor Corp. fell 1.4 percent. Sharp Corp. shed 3.6 percent. Yamaha Motor Corp. and Suzuki Motor Corp. both lost 1 percent.

Commodity shares in Australia came under pressure amid worries about the state of the global economy. Gold miner Newcrest Mining Ltd. lost 3.1 percent. Woodside Petroleum fell 1.1 percent. OZ Minerals fell 3.3 percent after the company said copper concentrate may have spilled from a derailed train.

In currency trading Thursday, the euro fell to $1.2929 from $1.2941 late Wednesday in New York. The dollar fell to 77.72 yen from 77.91 yen.

On Wall Street, the Dow Jones industrial average fell 1.1 percent to 12,151.41. The S&P 500 fell 1.3 percent to 1,249.64. The Nasdaq composite declined 1.3 percent to 2,589.98.

Benchmark crude for February delivery rose 6 cents to $99.42 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.98 to settle at $99.36 in New York on Wednesday.