US stocks off, gold rises

NEW YORK : Gold rose, treasuries headed for the biggest advance in five months and stocks fell as investors' focus returned to the US tax debate and Europe's debt crisis following the re-election of President Barack Obama.

The 10-year Treasury yield declined as much as 12 basis points to 1.63 per cent Wednesday morning, US time.

In early trading, the Dow Jones industrial average was down 240.30 points, or 1.81 per cent, at 13,005.38. The Standard & Poor's 500 Index was down 26.57 points, or 1.86 per cent, at 1,401.82. The Nasdaq Composite Index was down 55.58 points, or 1.85 per cent, at 2,956.36.

The Stoxx Europe 600 Index lost 0.7 per cent after climbing as much as 0.7 per cent. Gold extended the longest rally in two months, while oil dropped from a two-week high.

Jittery investors scrambled for less-risky assets, with benchmark US Treasuries poised for their best one-day move since May.

Concerns persisted whether Obama could reach a timely deal with Republican lawmakers to avert the "fiscal cliff" - the $600 billion in automatic tax hikes and spending cuts set to kick in on Jan 1. Economists warned such a move would tip the world's biggest economy into a recession.

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