NEW YORK: The US dollar rose and global stocks fell on Friday as energy shares followed crude prices lower and investors worried about the pace of a fledgling US economic recovery.The Dow Jones industrial average closed below the 10,000 mark, as weak results from industrials overshado-wed robust earnings from bellwethers in technology.

The dollar and euro soared against sterling after data showed Britain was still mired in recession, with the economy shrinking 0.4 per cent in the third quarter, which stunned investors who had expected a return to growth.

Sterling plunged nearly three cents against the dollar and notched its biggest one-day decline against the euro in six months as traders bet the Bank of England was more likely to expand its quantitative easing program to secure a recovery.

The euro retreated, falling below US$1.50.

Oil stocks reversed early gains as US crude futures settled almost 1 per cent lower on skepticism that recovery was robust enough to spur demand.

“Any time the dollar shows signs of life, the stock market goes down. There’s a flight to safety,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

“The (weak) UK GDP gave strength to the dollar. And when the dollar is up, oil falls.”

World stocks fell, with the MSCI All-Country Word Index losing 0.76 per cent.

Weak industrial sector earnings also made investors question the recovery’s strength, which overshadowed robust results from technology heavyweights Microsoft Corp and Amazon.com Inc.

Shares of Burlington Northern Santa Fe Corp, the No. 2 US railroad, slid 6.5 per cent after it posted a 30 per cent drop in quarterly profit. The stock helped drag an S P industrials index down 1.7 per cent.

The Dow Jones industrial average closed down 109.13 points, or 1.08 per cent, at 9,972.18. The Standard Poor’s 500 Index slid 13.31 points, or 1.22 per cent, at 1,079.60. The Nasdaq Composite Index fell 10.82 points, or 0.50 per cent, at 2,154.47.

For the week, the Dow was off 0.2 per cent, the S P 500 shed 0.7 per cent and the Nasdaq slipped 0.1 per cent.

Stocks fell despite a surge in sales of previously owned US homes to a two-year high in September. Analysts said the rise was partially driven by a soon-to-expire tax incentive for first-time buyers.

Weekly US government data showing a decrease in stores of gasoline helped push crude prices lower, even as overall fuel inventories are still much higher than a year ago.

“Oil is holding around US$80 but the decline in equities markets and a stronger dollar mean the rally in oil prices has been stalled for now,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

US crude for December delivery settled down 69 cents a barrel at US$80.50, while Brent crude settled down 59 cents to US$78.92. — Reuters