Morning traders.Market wrap: Divisions in Europe and a sluggish...

Morning traders.

Market wrap: Divisions in Europe and a sluggish growth outlook from the US Federal Reserve sent US stocks, commodity prices and Australian futures lower overnight.

The December SPI futures contract ended the night session 37 points or 0.9% weaker at 4181 as the big Australian miners skidded in US trade and copper fell for a third night.

US stocks traded modestly higher until the afternoon release of the Fed's "beige book" confirmed that the pace of growth in the US remains desperately slow. The Dow was ahead about 2% but flipped over to end the session 72 points or 0.62% down. The S&P 500 dropped 1.26% to 1210 and the Nasdaq tumbled 2.01% as investors reacted to Apple's profit miss yesterday.

The Fed said the US economy was growing no faster than two months ago with growth "modest" or "slight" and business conditions "weaker or less certain". The struggling jobs market showed little change. Earlier economic news was more hopeful, with housing starts hitting a 17-month high and consumer inflation slowing.

European concerns resurfaced with euro-zone officials denying yesterday's reports of an agreement to increase a rescue fund as Germany and France remained divided over how to handle the debt crisis. Fresh conflict has emerged over the European Central Bank's role in leveraging the bailout fund. Moody's yesterday cut Spain's credit rating by two levels.

"Time is running out for Europe," the head of asset allocation for ING Investment Management told Bloomberg. "The longer it waits to fix itself, the more uncertainty there is. In the US, earnings are not bad, but we're seeing a bit of erosion in positive surprises. We set the top of the range on the S&P 500. It would take a lot of good news to get through 1,230."

Materials and technology companies led the falls in the US as oil and metals fell. Rio Tinto slumped 6%, BHP 4.2% and Alumina 7.8%.

Copper fell for a third straight night, bringing its weekly loss to at least 6% following Monday's three-week peak. In London, copper lost 3.6%, aluminium 1.25%, lead 3.05%, nickel 2.75% and zinc 2.7%. Tin rallied 1.8%. US copper was recently off 4.2%.

"I think there is a bit of concern about demand from China," a Danske Bank analyst told Reuters. "This week we saw relatively weak GDP numbers and of course copper is the most China-sensitive base metal. At the moment, the market's trading on global themes, global
risk appetite."

Oil sold off with US equities after earlier rallying following an unexpected fall in US inventories. Crude for November delivery was recently down $2.19 or 2.5% at US$86.15 a barrel.

Gold drifted lower for a second day, with market commentators describing a lack of catalysts for strong moves in either direction. Gold for December delivery was lately off $9.60 or 0.6% at US$1,643.20 an ounce.

The major European markets advanced as European investors remained optimistic about this weekend's summit meeting of euro-zone leaders. Britain's FTSE added 0.74%, Germany's DAX 0.61% and France's CAC 0.52%.

TRADING THEMES TODAY

MINERS UNDER PRESSURE: Our big miners copped some heavy treatment in US trade as the Fed's beige book added to pressure on companies most exposed to global growth. I'm not clear why the selling was so severe, but an index of US gold/silver miners lost 5.3%. Our futures appear fairly optimistic in the light of those falls, presumably because yesterday's rise on the ASX was so modest relative to US gains, therefore the index doesn't have as far to retreat. Time will tell. We're likely to see some profit-taking over the next two sessions ahead of this weekend's euro-zone summit. Expectations are high but Europe's record speaks for itself.

ECONOMIC NEWS: Reserve Bank Assistant Governor Malcolm Edey is due to address the International Swaps and Derivatives Association Annual Australia Conference at 9.30 am AEST. Quarterly business confidence figures are due at 11.30 am. This evening's overseas schedule includes British retail sales, European consumer confidence and from the US, weekly unemployment claims, existing-home sales, Philly Fed manufacturing index, leading index and natural gas storage.

Good luck to all.