New York: US Treasury bond and gold prices climbed on Tuesday, while stock prices dipped after news that a series of explosions in Mumbai had killed more than 100 people.
Crude oil prices rose sharply, keeping in sight of record highs, after Iran, the world's fourth largest oil exporter, rebuffed international demands to halt uranium enrichment.
Adding to worries about Iran's nuclear ambitions, and growing tensions between the West and North Korea, the explosions in India sent investors for the safety of bonds, pushing 10-year yields to the lowest in almost a month.
And coming on the heels of disappointing results from manufacturing bellwether Alcoa Inc. and a profit warning from Lucent Technologies Inc., it helped trigger a broad-based fall in US stocks.
"The blasts in India have put the market on edge," said Steve Leuer, an S&P 500 futures trader at X-FA Trading Group in Chicago.
"I think the Lucent news and also yesterday's Alcoa earnings-related news have also kept pressure on the market."
The Dow Jones industrial average was down around 45 points, or 0.4 per cent, at 11,058.33, it’s lowest since June 29.
The Standard & Poor's 500 Index fell a third of a percent to 1,263.15. Alcoa was the biggest drag on the Dow, falling 4.4 percent to $31.94 after the world's largest aluminum maker announced quarterly sales after the market's close on Monday that undershot Wall Street estimates.
US-listed shares of major Indian companies, including Tata Motors Ltd. fell after news of the bomb explosions in Mumbai, which hit packed commuter trains and stations on Tuesday.
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The Lucent profit warning also weighed on tech stocks in Asia and Europe, helping push Japan's Nikkei share average down half a percent to 15,473.82.
The UK's benchmark FTSE 100 fell 0.7 percent to 5,857.3, also weighed down by a broker downgrade on Vodafone.
Treasury bonds also gained support after the Bush administration said it had cut its estimate of this year's budget deficit by $127 billion to $296 billion due to surprisingly strong tax receipts in the year's first half.
Higher tax revenues would likely cut the government's need to issue new debt. Benchmark 10-year notes were up 8/32 in price to yield 5.10 per cent, down 3 basis points from late Monday and the lowest level since mid-June.
The 2-year yield stood at 5.17 per cent, unchanged from late Monday. Oil rose as Iran's deputy foreign minister, on a trip to China, rejected calls that Iran halt its uranium enrichment program, raising concern again that the nuclear spat may eventually lead to disruption in crude supply.
Boosted by fund buying after news of the deadly bombings in Mumbai, gold for August delivery gained $14.90 to $641 an ounce, and briefly touched a peak of $641.30, the highest since early June.
In the currency markets, the US dollar hit a near three-month high against the Canadian dollar after the Bank of Canada kept rates unchanged and gave no signal that it would raise rates any time soon.
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