US shares slide as shoppers spend less

Shares on Wall Street have edged lower as US consumers held back on purchases at the start of the holiday shopping season, dimming the recovery hopes for the world's biggest economy.

Disappointing sales were compounded by concerns about the potential failure of Dubai World, after the Dubai government said it wouldn't accept responsibility for the company's tens of billions of dollars of debt.

In midday trading, the Dow Jones Industrial Average fell 0.17 per cent to 10,292.47 and the Standard & Poor's 500 declined 0.27 per cent to 1088.55. The Nasdaq Composite climbed 0.54 per cent to 2126.81.

The holiday shopping season kicked off last Friday, the day after US Thanksgiving. Sales on Black Friday and 'Cyber Monday', today in the US, were estimated to be below last year.

The National Retail Federation on Monday said the average shopper spent US$343.31, down from US$372.57 a year ago, this past weekend, a sign that consumers remain somewhat reluctant spenders.

Shares in online retail giant Amazon.com surged 2.6 per cent to a record US$135.14, while Abercrombie & Fitch gained 1.1 per cent to US$40.41. Both were helped by a broker's upgrade.

But many other US retailers declined. Wal-Mart was down 0.2 per cent, Macy's falling 2.6 per cent and Gap down nearly 1 per cent. The S&P Retail Index fell 1.3 per cent.

Traders had a tough time in Europe too where there was a higher degree of concern about the woes of Dubai World. The Dow Jones Stoxx600 Index slid 1.2 per cent to 239.58 in London.

Banks in the U.K. led the declines. Royal Bank of Scotland had arranged more loans than any other bank for Dubai World in the last two years, according to JPMorgan Chase.

Shares in RBS dropped 4.5 per cent, Lloyds Banking Group Plc, the U.K.'s largest mortgage lender, slid 5.9 per cent, and Standard Chartered fell 2.4 per cent.

Shares in Bank of Ireland dropped 5.3 per cent after it said it would report a 3.4 billion euro loss on selling some of its "bad" loans to the country's "bad" bank.

Among national benchmarks across Europe, Germany's DAX dropped 1.03 per cent to 5627.06 and France's CAC 40 declined 1.11 per cent 3680.15 and the U.K.'s FTSE 100 lost 0.93 per cent to 5197.10.

On the monetary policy and economic front, investors are waiting for a meeting of the European Central Bank on Thursday and the latest US jobs report on Friday.

The ECB is expected to comment on how it plans to begin to reverse its loose monetary policy.

The meeting comes after inflation reappeared on radar screens in Europe overnight. Prices in the 16-nation euro region rose 0.6 per cent from a year earlier after falling 0.1 per cent in October, the European Union statistics office in Luxembourg said. Economists surveyed by Bloomberg News had projected a gain of 0.4 per cent.

On the currency front, the ICE Futures US dollar index, a gauge of the greenback's performance against six other major currencies, was down 0.2 per cent at 74.888.

The euro rose 0.2 per cent to US$1.4987, pulling back from last week's 15-month peak just above US$1.5140.

The Japanese yen stayed firm after hitting a 14-year high of 84.81 yen last week, according to Reuters data. The dollar last traded down 0.3 per cent at 86.12 yen, while the euro fell 0.3 per cent to 129.12 yen.

In commodities markets, gold dipped and oil edged slightly higher.

Spot gold stood at US$1172.20 an ounce by 1638 GMT, versus US$1176.70 an ounce late in New York on Friday

US light crude oil futures for January were up 30 cents at US$76.35 a barrel by 1503 GMT. London Brent crude gained 30 cents to US$77.48.