BANGKOK – Europe’s stock markets sank and Wall Street was poised to fall Tuesday as Greek bond holders remained at odds with finance officials over the interest rate they’ll receive from new bonds that aim to cut Greece’s debt mountain.

In Asia, stock markets mostly rose though trading was subdued because of Chinese New Year holidays. Markets in Hong Kong, mainland China, South Korea, Taiwan, Singapore, Malaysia and Vietnam were closed.

As trading got underway in Europe, Germany’s DAX fell 0.6 percent to 6,396.80 and Britain’s FTSE 100 was down 0.5 percent at 5,753.30. France’s CAC 40 dropped 0.7 percent to 3,315.90.

Auguring losses on Wall Street, Dow Jones futures slipped 0.3 percent to 12,610.

Hopes that Greece will reach a deal with private creditors on lowering its debt, thereby easing a key flash point in Europe’s debt crisis, have been dented by tough negotiations with creditors.

The interest rate is the key remaining variable in a complicated debt swap designed to slice some euro100 billion off Greece’s massive debt pile and bring it down to 120 percent of gross domestic product by 2020.

Finance ministers’ insistence that the rate be less than 4 percent has met resistance from bond holders who already have to give up on 50 percent of the face value of their investments and are expected to give the country between 20 or 30 years to repay them.

An agreement is necessary if Greece is to get the next batch of bailout cash that would prevent a debt default the could rock Europe’s financial system. Greece does not have enough money to cover a euro14.5 billion ($18.7 billion) bond repayment in March. A deal would allow the country to receive a second bailout package from other European governments and the IMF, and cut Greece’s debt from an estimated 160 percent of its annual economic output to 120 percent by 2020.

In Asia, Japan’s Nikkei 225 stock rose 0.2 percent to 8,785.33 despite the central bank cutting growth forecasts for the fiscal year ending March 2012 and the following year because of a slowdown in overseas demand and the strong yen.

Australia’s S&P/ASX 200 closed little changed at 4,224.20. Indonesia’s benchmark was up 0.1 percent at 3,994.91 and India’s Sensex was 1.5 percent higher at 16,997.35 after the Reserve Bank of India lowered cash reserve requirements for commercial lenders.

Thailand’s main index rose while New Zealand and the Philippines fell.

On Wall Street on Monday, the S&P 500 index eked out a tiny gain while traders kept an eye on talks in Europe to cut Greece’s crushing debt load and prevent a global financial crisis. Other indexes ended slightly lower.

Benchmark crude was up 26 cents at $99.84 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.25 to end Monday at $99.58 after Iran again threatened to block shipments of crude from the Persian Gulf. The latest threat followed a widely expected decision by the European Union to embargo imports of Iranian oil.

In currencies, the euro was down 0.2 percent at $1.3001 after jumping the day before. The dollar rose 0.4 percent to 77.25 yen.

TORONTO (Reuters) – Toronto's main stock index fell to a seven-week low on Thursday as resource-related issues slid after a meeting of European leaders failed to stem market fears about the euro zone debt crisis.

Energy and materials were the main drags on the index, each falling nearly 1 percent, as oil and gas producers and gold miners were hit by fears of a slowdown in Europe.

Enbridge Inc fell 2.8 percent to C$35.11 and Barrick Gold slumped 1.4 percent to C$49.55 to lead their respective sector's losses.

"The simple answer to present market woes continues to be Europe," said Elvis Picardo, strategist and vice-president of research at Global Securities. "On the TSX, the downside is being led by commodity groups."

The Toronto Stock Exchange's S&P/TSX composite index ended the session down 86.39 points, or 0.75 percent, at 11,485.32, its lowest close since October 5.

With U.S. markets closed for Thanksgiving and the absence of any significant North American earnings news, investors were focused on the outcome of a meeting between the leaders of Germany, France and Italy – the euro zone's top three economies.

Apart from agreeing not to pressure the European Central Bank to do more to rescue the region from its debt woes, the meeting between French President Nicolas Sarkozy, German Chancellor Angela Merkel and Italian Prime Minister Mario Monti produced little for investors to rally behind.

"This is the train wreck unfolding in slow motion," said Paul Taylor, chief investment officer at BMO Harris.

On Wednesday, a weak German 10-year bond auction pushed the cost of borrowing for Europe's economic heavyweight above that of the United States for the first time since October, helping send global markets lower.

Despite having little exposure to European sovereign debt holdings, Canadian financials were also caught in Thursday's slide, dipping 0.7 percent.

Bank of Montreal skidded 1.7 percent to C$55.25 while Bank of Nova Scotia fell 0.9 percent to C$48.35.

($1=$1.05 Canadian)

(Editing by Rob Wilson)

NEW YORK – Trouble on two fronts in the European debt crisis sent American stocks tumbling Wednesday to their biggest loss since the rocky trading of last summer. The Dow Jones industrial average fell almost 400 points.

Stocks were down from the opening bell after borrowing costs in Italy spiked to dangerous levels, a sign that investors are losing faith in Italy’s ability to repay its national debt.

“Italy is potentially too big to bail out, but that’s the problem,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “It’s spiraling out, and the question is now, how do you fix it?”

In Greece, meanwhile, power-sharing talks aimed at avoiding a default broke down in chaos.

The Italian economy is more than six times larger than that of Greece, which so far has been the center of the continent’s debt problem. American investors are worried that the consequences from Europe could include a freeze in lending, the disintegration of the euro currency or a bruising recession that would hurt the U.S.

They sold stocks as a result. The Dow finished down 389.24 points, at 11,780.94.

“The market loves a quick solution, and we’re obviously not getting one,” said Mark Lehmann, director of equities of JMP Securities.

The slide in stocks was broad: Only a single stock in the Standard & Poor’s 500, Best Buy, finished higher for the day. Financial companies were among the hardest hit because they would suffer first if Europe’s debt problem spins out of control.

Morgan Stanley stock plunged 8 percent and Goldman Sachs 7 percent. In regulatory filings last week, Morgan Stanley reported it had $1.8 billion in liabilities related to Italy, and Goldman said it had $28 billion related to all of Europe.

Markets fear that a chaotic default by Greece would lead to huge losses for European banks. That could cause a global lending freeze similar to what happened after the investment house Lehman Brothers fell in 2008.

In Italy, where the crisis is only beginning, the country’s borrowing rate has skyrocketed to a level that is widely considered to be unsustainable. The higher rates will make it far more difficult and expensive for Italy to roll over its debts. It has over $400 billion to raise in 2012 alone. Italy’s total economy is about $2 trillion.

The 389-point decline for the Dow was the worst since Sept. 22. The S&P 500 closed down 46.82 points at 1,229.10. The S&P, the broadest major stock index, declined 3.7 percent, its worst day since Aug. 18.

Over the summer, swings of 3 or 4 percent a day for the stock market were common. Investors were focused on a debt showdown in Washington and fear of a second recession.

Lately, Europe has pushed everything else to the back burner, and the volatility has continued. Last week, the Dow fell 276 points Monday and 297 points Tuesday, both because of instability in Europe. It rose 100 or more three of the next five days.

The Nasdaq composite index finished Wednesday down 105.84, or 3.9 percent, at 2,621.65.

European stock markets fell sharply, too. The main stock index in Italy finished the day down 3.8 percent. The DAX index in Germany and the CAC-40 in France each declined 2.2 percent.

In the United States, prices rose for assets seen by investors as reasonably safe. The dollar rose 1.6 percent against the euro, a reflection of the instability in the 17 nations that use the euro.

The yield on the 10-year Treasury note fell to 1.96 percent from 2.08 percent Tuesday, a steep drop. Falling Treasury yields are a sign of rising bond prices, both indications that investors feel safe buying American debt.

In Italy, the yield on the benchmark government bond blew past 7 percent. That was considered an important level because Greece, Portugal and Ireland required bailouts from other nations when their bond yields hit 7 percent.

Italy is of more concern because it has the third-largest economy in Europe — more than twice as big as Greece, Portugal and Ireland combined. And its debt, $2.6 trillion, is too large for other European countries to erase.

Italian Premier Silvio Berlusconi promised late Tuesday to step aside after a new budget is passed, but there are concerns that the transition will be difficult. Markets see Berlusconi as an impediment to far-reaching economic reforms.

The benchmark Italian bond rate spiked to 7.4 percent, a startling increase of 0.82 percent point from the day before. It settled down later in the day, to 7.26 percent.

In Greece, Prime Minister George Papandreou told the nation that the political parties were joining together to save it from going broke. Then power-sharing talks broke down, and political leaders failed to name a new prime minister.

Papandreou threw world markets into turmoil last week when he stunned European leaders by announcing he would put a hard-fought bailout deal for Greece up for a popular vote. He later backed off that plan and announced he would step aside.

When an interim government takes over for him, its main job will be to secure the next $11 billion or so of the $150 billion bailout package set up for Greece last year.

___

AP Business Writer Francesca Levy in New York contributed to this report.

LONDON – Uncertainty over who will lead Italy through the debt crisis once Premier Silvio Berlusconi resigns slammed European stocks and bonds on Wednesday, pushing Rome’s borrowing rates to worrying new highs.

Tuesday’s news that Berlusconi had finally bowed to pressure and would resign once new austerity measures are passed had helped markets in the U.S. and Asia higher. Berlusconi had been perceived as part of the problem in the political deadlock gripping Italy.

That buying persisted for a while in Europe, but sentiment quickly soured again as traders worried about Italy’s uncertain future.

Italy’s ten-year yield jumped above the 7 percent rate widely considered to be unsustainable in the long-run. When Greece, Ireland and Portugal saw their ten-year borrowing rates rise above 7 percent, the markets concluded they had to be bailed out.

By late morning, the yield was trading at 7.35 percent, up 0.77 of a percentage point from the previous day.

What happens in Italy is crucial to the eurozone’s survival. With debts of around euro1.9 trillion ($2.6 trillion), Italy’s debts are considered far too big for Europe to bail out.

Higher rates would make it more difficult and expensive for Italy to roll over its debts. The country has over euro300 billion ($412 billion) to raise in 2012 alone.

The worry appears to be that even without Berlusconi at the helm, Italy faces a period of political deadlock.

The next government will likely face the same pressures as Berlusconi — to enact quick reforms to shore up Italy’s defenses against Europe’s raging debt crisis.

“The positive impact of Berlusconi’s promised resignation is being diluted by a lack of clarity on where we go from there,” said Adam Cole, an analyst at RBC Capital Markets. “The possibilities range from a technocrat government — most market positive — to new elections — most negative.”

In Europe, the main Milan stock index was down 4.2 percent while Germany’s DAX was down 1.8 percent at 5,855 and the CAC-40 in France fell 1.9 percent to 33,085. The FTSE 100 index of leading British shares was 1.2 percent lower at 5,500.

The euro also fell sharply, trading 1.1 percent lower at $1.3673.

Wall Street was poised for a retreat, too — Dow futures were down 1.3 percent at 11,972 while the broader Standard & Poor’s 500 futures fell 1.7 percent to 1,252.

As well as keeping one eye on developments in Rome, investors are waiting to hear who will be the new prime minister in Greece.

On Tuesday, Socialist Cabinet members issued their resignations, paving the way for the creation of a new government, which is only expected to last until February.

Former European Central Bank vice-president Lucas Papademos was the early favorite to become the interim prime minister, but it was unclear whether he remained in the running.

The new government will be tasked to secure the country’s new euro130 billion ($179 billion) European rescue package and then get it through parliament. That approval will allow the release of a euro8 billion ($11 billion) loan installment, without which Greece will go bankrupt before Christmas, potentially wrecking Europe’s banking system and sending the global economy back into recession.

The political crisis erupted last week, when Premier George Papandreou said he would put the new European rescue package to a referendum. Other eurozone nations were horrified by the delay, markets around the world tanked and Greece’s international creditors froze the payment of the next bailout.

Earlier in Asia, sentiment had been boosted by the Berlusconi pledge, with Japan’s Nikkei 225 index closing 1.2 percent higher at 8,755.44. South Korea’s Kospi added 0.2 percent to 1,907.53 and Hong Kong’s Hang Seng jumped 1.7 percent to 20,014.43.

There was also some cheer from the news that China’s stubbornly-high inflation fell in October as rapid rises in food costs eased. The decline was seen positively by investors as it gives Beijing more room to stimulate China’s economy.

Mainland China’s Shanghai Composite Index gained 0.8 percent to 2,524.92 and the smaller Shenzhen Composite Index rose 1.6 percent to 1,071.04.

Oil prices tracked equities lower — benchmark crude was down 96 cents at $95.84 a barrel in electronic trading on the New York Mercantile Exchange.

___

Pamela Sampson in Bangkok contributed to this report.

NEW YORK (Reuters) – Stock index futures rose in choppy trade on Thursday on talk the Greek government might collapse, thus avoiding a referendum on its euro zone membership and easing concerns about an imminent default.

European shares recovered from early losses and rose 1 percent, with the bank sector, a key focus because of its sovereign debt exposure, up 1.4 percent, and a Greek bank index up 8.4 percent.

"The prevailing sentiment is (Greek Prime Minister George) Papandreou is on the brink of being ousted, and if that's the case there's no referendum and we're back to where we were a week ago," said Art Hogan, managing director of Lazard Capital Markets in New York.

S&P 500 futures rose 5.5 points and were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 67 points, and Nasdaq 100 futures rose 4.25 points.

European leaders agreed last week on a plan to reduce Greece's debt and strengthen the region's bailout fund in a move that helped spark a month-end rally. October was the best month for U.S. stocks in 20 years.

Papandreou has not resigned and does not intend to do so, his chief of staff told a Greek newspaper.

France and Germany earlier told Athens it would not receive its next aid tranche until a national referendum had passed, sparking fears Greece could default and the crisis could spread to larger economies.

In the United States, the Labor Department is due to release weekly unemployment insurance applications data at 8:30 a.m. EDT (1230 GMT). First-time claims are forecast at 400,000, according to a Reuters poll versus 402,000 in the previous week.

The Labor Department also releases preliminary third-quarter productivity and labor costs.

U.S. companies announcing quarterly results later Thursday include Starbucks Corp, American International Group Inc and First Solar Inc.

The Institute for Supply Management releases its October non-manufacturing index at 10 a.m. EDT (1400 GMT). Economists forecast a reading of 53.5 versus 53.0 in September.

The Commerce Department releases September factory orders at 10 a.m. (1400 GMT). Economists in a Reuters survey expect a 0.1 percent fall, compared with a 0.2 percent drop in August.

(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)

BANGKOK – Asian stock markets fell Thursday for the fourth straight day as a European deal to bail Greece out of its financial mess appeared to be on the verge of unraveling.

Hong Kong’s Hang Seng fell 1.2 percent to 19,495.01. South Korea’s Kospi lost 0.7 percent to 1,885.58 and Australia’s S&P/ASX 200 shed 0.1 percent to 4,220.65. Benchmarks in Singapore, Taiwan, Malaysia and Indonesia were also lower.

Japanese markets were closed for a national holiday. Mainland Chinese shares rose.

Greece’s prime minister unexpectedly announced Monday that he would call a national vote on the European bailout plan that entails painful tax increases and drastic welfare cuts in exchange for massive aid to keep his debt-ridden nation solvent.

European leaders then drew a line in the sand for Greece, saying its referendum on the hard-won bailout deal will decide whether it stays in the 17-nation grouping that uses the euro common currency — and vowing Athens will not get new aid until the result is in.

The acknowledgment that the vote could see Greece leaving the currency union is the first official admission that such an exit is possible and follows almost two years of pledges to the contrary. The referendum will likely take place on Dec. 4 unless the government of Prime Minister George Papandreou falls beforehand.

“Ahead of the vote markets will remain highly nervous and risk aversion will remain elevated. Consequently risk assets are set to face further pressure,” Credit Agricole CIB said in a research note.

Should Greek voters reject the austerity plan, it could also lead to a messy default on the country’s debt that would likely cause massive losses for banks that hold Greek bonds — and possibly spark a wider financial crisis that could send Europe into recession.

Papandreou is scheduled to explain his stance when he meets with leaders of the Group of 20 nations at a summit in France on Thursday and Friday.

The uncertainty about what lies ahead for the European Union — the world’s largest economic grouping — as well as the subset of nations that use the euro common currency, hit energy stocks hard.

Hong Kong-listed PetroChina Co., the country’s biggest oil and gas company, fell 3.5 percent. State-owned coal miner China Shenhua Energy lost 2.8 percent. Energy Resources of Australia was down 2.8 percent.

South Korea’s LG Electronics plummeted 8.5 percent following news reports that the world’s No. 3 mobile phone maker was seeking to issue new shares, Yonhap News Agency said.

Hong Kong-listed shares of Lenovo Group, a world leader in personal computer manufacturers, rose 4.8 percent a day after reporting that its profit in the first half of the year nearly doubled on strong emerging market sales.

In the U.S., Wall Street ended higher after an increase in hiring by private companies helped lift stock prices.

Automatic Data Processing said company payrolls rose by 110,000 in October, more than economists had expected. ADP also revised its survey results for September higher. Investors see ADP’s report as a precursor to the government’s broader employment report, which is due out Friday.

The Federal Reserve said Wednesday the economy was likely to expand modestly over the next two years. But Fed Chairman Ben Bernanke cautioned that the pace of economic growth will likely be “frustratingly slow.” The Fed said it would not take any more steps to help the economy for now, but it left open the possibility of more steps later.

The Dow Jones industrial average gained 1.5 percent to close at 11,836.04. The Standard and Poor’s 500 rose 1.6 percent to 1,237.90. The Nasdaq composite gained 1.3 percent to 2,639.98.

Benchmark crude for December delivery was down 98 cents at $91.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 32 cents to settle at $92.51 in New York on Wednesday.

In currencies, the euro fell to $1.3690 from $1.3765 late Wednesday in New York. The dollar slipped slightly to 78.04 yen from 78.06 yen.

TORONTO (Reuters) – Toronto's main stock index dipped lower on Wednesday morning, pressured by falling commodity prices, as uncertainty over Europe's debt crisis again dogged the market.

The TSX had rallied more than 3 percent in the previous two sessions on hopes that euro zone leaders were readying decisive action to tackle the regions debt woes.

But investors pulled back on Wednesday, as markets focused on international auditors heading for Athens to inspect the Greek government's austerity plan, while a German suggestion that a new bailout may be renegotiated caused consternation.

"We've had quite a roller-coaster week," said Francis Campeau, a broker at MF Global Canada in Montreal. "The street is waiting on the side to see if all the speculation about the plan to save Europe will pan out."

At 10:44 a.m. EDT, the Toronto Stock Exchange's S&P/TSX composite index was down 32.63 points, or 0.28 percent, at 11,788.46, after opening higher. Seven of the 10 main index groups were lower.

Resource issues weighed as economic uncertainty and a strong U.S. dollar pressured commodity prices. The materials sector fell 0.5 percent, while energy issues slid 0.6 percent.

Potash Corp was the heaviest decliner, down 2.7 percent at C$48.66, while Teck Resources fell 2.7 percent to C$31.20 and Suncor Energy lost 0.5 percent to C$28.24.

"Any growth stories are under pressure today," added Campeau. "Copper is down 4 percent, and copper is often the proxy of risk appetite and global world demand."

Financials were flat. Toronto-Dominion Bank was the heaviest gainer on the index, up 0.5 percent at C$74.15, while Manulife Financial tumbled 1.7 percent to C$12.04 and Bank of Nova Scotia slid 0.4 percent to C$52.78.

Shares of Yellow Media Inc plunged 46.5 percent to C$0.30 after the debt-laden telephone directory publisher said it would take a C$2.9 billion charge in the third quarter.

In the latest economic data, new orders for long-lasting U.S. manufactured goods slipped in August on weak demand for motor vehicles, but a rebound in a gauge of business spending suggested the U.S. economy would avoid another recession.

(Reporting by Trish Nixon; editing by Rob Wilson)

LONDON (Reuters) – Investor hopes for a bigger bailout fund for euro zone debtors gave way to worries about the details on Wednesday, putting the brakes on a three-session stock rally and sending European shares lower.

The dollar rose and core euro zone government bond yields were flat.

Equity markets have rallied over the past few sessions on expectations that European officials will aggressively tackle the debt crisis in its peripheral economies, notably Greece, by boosting the euro zone's 440 billion euro rescue fund.

But the plans face opposition in Germany and there are signs of a split within the currency bloc over the terms of Greece's next bailout.

European Commission President Jose Manuel Barroso, however, indicated Greek banks could receive more help [ID:nL5E7KS0LH].

The uncertainty was enough to take the air out of the tentative global stock rally.

World stocks as measured by MSCI were down 0.1 percent with the FTSEurofirst 300 opening sharply lower before stabilizing around a half a percent down.

The European index has lost close to 17 percent this year.

Japan's Nikkei earlier closed flat.

"The market has obviously got enthusiastic about discussions about the European Financial Stability Fund," said Andrea Williams, fund manager at Royal London Asset Management.

"But we are a long way from it being concluded."

International auditors were heading for Athens to continue discussions on the next tranche of agreed aid, while Germany suggested a new bailout may be renegotiated.

EURO LEVELS

The euro rose 0.1 percent to $1.3607, paring some of the previous day's gains when it rose to a high of $1.3668.

It has lost 5.6 percent so far this month but is off an eight-month low of $1.3361 hit on Monday.

"We saw a late reversal of some of last night's big risk on moves on reports that European leaders were not completely united on the planned policy response," ANZ said in a note.

The dollar was slightly higher against a basket of major currencies.

German Bunds reversed early losses and briefly turned negative on the day after Barroso spoke.

"There were comments from Barroso on considering a wider lending mechanism to help the Greek banking system and that's knocked Bunds a bit and also we have the five-year (German) supply coming up," a trader said.

Germany will sell 6 billion euros of new 5-year bonds later in the day.

(Reporting by Jeremy Gaunt; editing by Anna Willard)

NEW YORK (Reuters) – Stocks fell on Monday but staged a late comeback after fears of a looming Greek debt default diminished on news of a possible deal to advance new bailout funds to Greece.

Stocks spent most the session sharply lower after European leaders disappointed investors by failing to come up with any new solutions to the euro zone's sovereign debt crisis over the weekend.

However, a Greek finance ministry official said after talks on Monday with the European Union and International Monetary Fund that the country was near an agreement with international lenders to continue receiving money.

"For the time being it looks as though there is hope the conversation is going to take on a more positive and constructive tone," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"A little reason for a little buoyancy in the market, but we've seen this before."

Energy and financial stocks were among the worst performers of the session. The PHLX oil service sector index (.OSX) dropped 1.7 percent as oil prices settled down 2.6 percent to $85.70 on demand worries.

The KBW bank index (.BKX) fell 2.8 percent following a steep decline in European banks on worries euro zone leaders won't be able to prevent debt-stricken Greece from sliding into default. Citigroup Inc (C.N) slipped 4.4 percent to $27.71.

International lenders told Greece on Monday it must shrink its public sector and improve tax collection to avoid default within weeks as investors, unnerved by political setbacks in Europe dumped risky euro zone assets.

The Federal Reserve will begin a two-day meeting on Tuesday and is poised to increase downward pressure on longer-term interest rates this week in a bid to accelerate a sputtering U.S. recovery.

"It's the Greece thing and the Fed meeting this week. We've seen a lot of write-up on this Operation Twist, a lot of it may be baked in," said Terry Morris, senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.

The Dow Jones industrial average (.DJI) dropped 108.08 points, or 0.94 percent, to 11,401.01. The Standard & Poor's 500 Index (.SPX) lost 11.92 points, or 0.98 percent, to 1,204.09. The Nasdaq Composite Index (.IXIC) edged down 9.48 points, or 0.36 percent, to 2,612.83.

In the "twist" operation, traders expect the Fed to try to stimulate growth by pushing down longer-term debt yields by buying bonds and selling short-term debt. A Fed statement is expected on Wednesday at the end of the meetings.

Doubts about U.S. fiscal policy were also spoiling the appetite for stocks. President Barack Obama laid out a $3 trillion plan to cut U.S. deficits by raising taxes on the rich, but Republicans mocked it as a political stunt, signaling the proposal has little chance of becoming law.

Apple Inc (AAPL.O) helped curb declines on the Nasdaq as shares hit an all-time high of $413.23 earlier before closing up 2.8 percent to $411.63. An analyst said the stock had broken through technical levels, and Morgan Stanley included the iPad maker in a list of companies capable of increasing or initiating dividends.

Caterpillar Inc (CAT.N) was one of the worst performers on the Dow, off 1.5 to $84.60 after Raymond James cut its rating on the world's largest construction equipment maker, citing slowing global economic growth.

Volume was light, with about 7.11 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, slightly below the daily average of 7.9 billion.

Declining stocks outnumbered advancing ones on the NYSE by 2,310 to 667, while on the Nasdaq, decliners beat advancers 2,030 to 552.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

NEW YORK (Reuters) – The Dow and the S&P 500 rose modestly in volatile trading on Wednesday, as equities bounced around on heightened uncertainty surrounding Federal Reserve Chairman Ben Bernanke’s speech to central bankers on Friday.

The market’s swings came a day after the three major U.S. stock indexes rallied 3 percent to 4 percent on hopes that Bernanke would hint at possible stimulus measures to aid the struggling economy.

Sectors that led Tuesday’s rally, such as energy and technology, shed gains. Growth stocks such as Nvidia and Netflix slid.

Retailers and banks, however, gained ground. Dow component Home Depot shot up 3.5 percent to $34.28, while the KBW Bank Index climbed 1.8 percent.

“I think after a run-up like yesterday, a little bit of choppy action is not surprising,” said Frank Gretz, market analyst and technician at Shields & Co., a brokerage in New York. “People are buying value stocks, so the uptrend is still intact.

“This kind of choppy action is what you’re going to have to live with for a while,” he said. “When the selling is out of the way, there’s no more sellers left, so they (stocks) go back up.”

The S&P financials index advanced 1.4 percent, with JPMorgan Chase & Co shares up 1.8 percent at $35.40.

Bank of America Corp rose 9.8 percent to $6.92, reversing losses on Tuesday, when the Dow component hit a 2-1/2-year low on fears it may have to raise large amounts of capital. BofA shares remain down more than 30 percent so far this month.

Equity indexes rose as much as 1 percent earlier after a stronger-than-expected increase in July durable goods orders, but then gave up those gains by late morning. Traders remained on tenterhooks over whether Bernanke would announce concrete Fed action or simply outline gradualist measures.

The Dow Jones industrial average advanced 20.78 points, or 0.19 percent, to 11,197.54. The Standard & Poor’s 500 Index rose 3.10 points, or 0.27 percent, to 1,165.45. The Nasdaq Composite Index fell 5.93 points, or 0.24 percent, to 2,440.13.

Exchange-traded funds tracking gold stocks and gold-mining stocks fell after bullion futures dropped more than 4 percent. The SPDR Gold Trust Index declined 3.7 percent, while the Market Vectors Gold Miners Index fell 4 percent.

Among individual decliners, Barrick Gold shares dropped 4.3 percent to $48.49, Goldcorp Inc shares fell 5.3 percent to $48.58 and Kinross Gold shares lost 3.4 percent to $16.48.

The government reported that new orders for long-lasting U.S. manufactured goods surged in July, rising double the amount economists had forecast.

(Reporting by Ashley Lau; Editing by Jan Paschal)