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Stock indexes swung from gains to losses and back again Tuesday afternoon, after the Federal Reserve cautioned that Europe’s financial crisis still poses a threat to the world’s economy.

The Dow Jones industrial average rose 7 points, or 0.1 percent, to 12,028 as of 3 p.m. Eastern time. It had risen as high as 126 points earlier Tuesday after two strong auctions of European debt reassured investors.

The Federal Reserve portrayed the U.S. economy as slightly healthier but cautioned that it remains vulnerable to the European debt crisis. “Strains in global financial markets continue to pose significant downside risks to the economic outlook,” the Fed said in a statement.

The Spanish government was able to sell short-term debt at much lower interest rates Tuesday compared with a month ago, a signal that markets are becoming less fearful about the government’s ability to repay its debt.

In its first sale of short-term bills, the European Financial Stability Fund raised 1.9 billion euros ($2.6 billion) from investors at an average rate of 0.22 percent. That’s below the rate Germany pays for the similar bills. “This is an amazing success,” Carl Weinberg, chief economist at High Frequency Economics, wrote in a note to clients.

The Dow sank 162 points Monday when Moody’s and Fitch warned that the fiscal agreement reached last week among European leaders fell far short of what was needed to contain that region’s debt crisis.

The Commerce Department reported Tuesday that retail sales rose for the sixth straight month in November. Sales increased just 0.2 percent, below what analysts had expected. But the government also revised the previous month’s slightly higher. That was the encouraging part, said Tim Hoyle, director of research at Haverford Investments. “It reassures you that the economy is going in the right direction,” Hoyle said cash advance to savings account.

Energy companies led the market higher as crude oil rose back above $100. Exxon Mobil Corp. rose 2 percent, Chevron Corp. 1.5 percent. Drugmaker Pfizer added 2.1 percent, the most of the 30 companies in the Dow. Pfizer said it plans to buy back up to $10 billion of its own stock.

The Standard & Poor’s 500 index dropped 2 points, or 0.2 percent, to 1,233. The Nasdaq composite fell 14 points, or 0.5 percent, to 2,598.

The Vix, a measure of stock market volatility, fell to 25. It has dropped 10 percent in December. The index remained above 30 from early August until last week. Hoyle said a sustained fall in the Vix usually is followed by a rise in stock prices. The recent trend “sets us up for a little Santa Claus rally between now and the end of the year.”

The yield on the 10-year Treasury note fell to 1.95 percent from 2.02 percent late Monday after an auction of new 10-year notes drew strong demand.

Urban Outfitters jumped 6 percent, the most in the S&P 500 index, after the retailer said its sales were rising faster than analysts were expecting. The Philadelphia-based company owns Urban Outfitters stores, Anthropologie and Free People.

Sprint Nextel Corp. rose 1 percent as it looked like its rival AT&T Inc. would be unable to pull off an acquisition of T-Mobile USA. Sprint agreed to drop a lawsuit against AT&T now that the deal appears to be in jeopardy. Sprint had been lobbying to stop it.

Electronics retailer Best Buy plunged 15 percent. The company said its third-quarter income sank 29 percent as it cut prices on tablets and TVs to drive sales and traffic during the busy holiday season.

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Michael Woodford, who was fired as chief executive of Japanese camera and medical equipment company Olympus after blowing the whistle on dubious spending, said Thursday that he is resigning from the board.

Woodford said the decision was difficult because he still cares about Olympus Corp. and hopes it will come clean. Woodford was still a member of the board because dismissal from it can only be done by shareholders.

Although it initially denied wrongdoing, Tokyo-based Olympus has acknowledged a $687 million payment for financial advice and expensive acquisitions to cover up investment losses dating to the 1990s.

“It has been a difficult decision for me to resign from a company that I have devoted my entire life to,” said Woodford, 51, a Briton who worked at Olympus for about three decades and became a rare foreigner to head a major Japanese company.

But he said he lost hope that the Olympus board would move toward reform after seeing a Nov. 28 message from Olympus’ new president, Shuichi Takayama. He said he now thinks that the Olympus board will not change.

He also said stakeholders should decide who should lead Olympus and called for a shareholders meeting. He will be working with stakeholders to propose a new board, he said.

Woodford, fired Oct. 14, has called for the entire board to resign and to bring in outside members to the board for more transparency.

Olympus’ bookkeeping is now under investigation in Japan, the U.S. and Great Britain. The fiasco has evolved into one of Japan’s biggest corporate scandals.

Woodford was in Japan last week to speak with Japanese prosecutors and police and also spoke with the Olympus board during the visit. He says he is also speaking with U.S. and British authorities.

Speculation is rife that the amount that Olympus has falsified in its financial reports could be massive. Japanese magazine Facta was first to report on the dubious money.

Olympus must submit a proper financial report by Dec. 14, or it risks being delisted by the Tokyo Stock Exchange.

“I am strongly of the view that it’s completely inappropriate for the current management team who are tainted by its past mistakes to make choices about the identity of new board members,” Woodford said.

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An “overhaul” of European treaties is needed to help restore market confidence in the eurozone’s ability to reduce high state debt and deficits, the French budget minister said Sunday.

Valerie Pecresse said a new governance pact among eurozone members could include “real regulators, real sanctions” to help restore confidence in the currency union.

Speaking on Canal Plus TV, she said the eurozone’s biggest economies _ France, Germany and Italy _ want to be the “motor” of a more integrated Europe.

“We won’t restore confidence unless we show proof _ very quickly _ about the unflailing solidity and solidarity of the eurozone,” Pecresse said.

Pecresse said each country must rid itself of the debt and deficit problems that are behind the continent’s deepening debt crisis.

German media reported this weekend that German Chancellor Angela Merkel and French President Nicolas Sarkozy are pushing for swift legal changes that would force eurozone members to comply with strict rules for budget discipline, like tough and easily enforceable sanctions for violators.

Sarkozy and Merkel have argued that the European Union’s treaties must be amended to guarantee a strict enforcement of the currency zone’s growth and stability pact payday loans.

Treaty changes, however, are complicated to engineer and take a lot of time _ probably more than the troubled eurozone currently has with markets doubting the solidity of several member states such as Italy.

One alternative could be a treaty between the governments involved, which would later be merged into EU law _ as has happened before with Europe’s Schengen visa-free travel agreement, German newspapers Welt am Sonntag and Bild reported.

The new initiative could be announced as early as this week and concluded early next year, Welt am Sonntag reported.

Germany’s government, in a statement Sunday, did not comment on the question of an intergovernmental treaty but said it’s continuing to push for changes to the EU treaty to be discussed at a summit next month in a bid to strengthen the currency union.

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ArcelorMittal, the world’s biggest steel maker, posted Thursday a 50 percent drop in third-quarter net profit compared to the same period a year earlier. The company blamed weakening economic conditions and increasing uncertainty in the market and said the outlook for the rest of the year was difficult.

However, Lakshmi N. Mittal, Chairman and CEO, said ArcelorMittal’s core profitability remained resilient.

Net profit dropped to $700 million in the third quarter, down from $1.4 billion a year earlier. But sales increased 22.6 percent to $24.2 billion from $19.7 billion.

“Despite weakening economic conditions, ArcelorMittal has reported EBITDA within the forecasted range,” Mittal said in a statement. “Uncertainties around the economic outlook have increased in recent weeks, impacting the confidence levels of our customers, so as we move in to the 4Q we are facing both volume and price pressures. However, our core profitability is resilient, supported by our growing mining business, our market leading value-added steel franchise and our management gains programs. As a result I remain confident that the Group’s EBITDA in the second half of 2011 will be above that of the second half of 2010.”

Net income for the quarter was $659 million, down significantly from $1.5 billion in the three months ending in June, as well as from the $1.3 billion reported for the third quarter of 2010.

In a conference call with reporters, Aditya Mittal, the company’s chief financial officer, said capacity utilization was about 71 percent in the third quarter, and he expected that to fall slightly in the fourth quarter.

In October, the Luxembourg-based company shut two blast furnaces at its site in Liege, Belgium. It was ArcelorMittal’s first significant closure since it was formed in 2006 as a result of the merger between Mittal Steel and Arcelor to create the world’s largest steel business.

However, Aditya Mittal said Thursday, “As of today, I do not believe any more capacity shutdowns are planned.”

Although Europe’s economic recovery will be “more muted” than originally anticipated, he said that in the long term there was potential for grown in demand in Eastern Europe, where there is currently low steel consumption per capita.

In October, ArcelorMittal pulled out of a planned deal to jointly control the Australian company Macarthur Coal Ltd. with U.S.-based Peabody Energy Corp. The total cost of the deal was reported to be in excess of $5 billion (euro3.62 billion).

Aditya Mittal said in the end it would have been too much money to spend for a company it would not have fully controlled. He said the money would be used instead to pay down ArcelorMittal’s debts.

He also defended the 2006 merger between Mittal Steel and Arcelor.

“I think through the merger we have created a much stronger company that is much more able to withstand the crisis better than either company alone,” he said.

In 2009, ArcelorMittal was responsible for about 6 percent of global steel output.

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Asian stock markets were mostly lower Monday as investors shifted their focus from Europe’s debt woes to the strength of the U.S. economy. Japan sold the yen to limit its export-sapping strength.

Hong Kong’s Hang Seng slipped 1.1 percent to 19,791.74 and South Korea’s Kospi fell 1 percent to 1,910.94. Benchmarks in Australia, mainland China, Singapore and Taiwan also posted losses.

The Nikkei 225 index in Tokyo swung between positive and negative territory after Japan intervened to weaken its currency, which had earlier hit a new post World War II high against the greenback. The Nikkei was 0.2 percent lower at 9,021.08 in afternoon trading.

The strong yen has dented earnings of Japanese corporations such as Nintendo Co. and Toyota Motor Corp. and hurt the economy’s recovery from the March 11 earthquake and tsunami. Finance Minister Jun Azumi said monetary authorities could continue intervening.

The dollar surged about 5 percent to above 79 yen, and Japan’s export sector _ whose fortunes are largely tied to the relative strength of the yen _ rose abruptly.

Isuzu Motors Corp. jumped 4.3 percent. Canon Inc. rose 1.7 percent and Nikon Corp. added 2.3 percent. Nintendo Co. gained 3.6 percent.

In Sydney, shares of Australian flag carrier Qantas Airways Ltd. jumped 4.3 percent after a court ordered employees of the world’s 10th-largest airlines back to work. The airline had grounded its entire fleet on Saturday following weeks of strikes by its workers, but an arbitration court on Sunday ordered an end to the strikes and canceled the staff lockout.

Last week, investors were cheered by the debt crisis deal reached by European leaders. European banks were asked to take a 50 percent loss on their holdings of Greek government bonds. They will also set aside more money to cushion against future losses. Leaders also pledged to expand the European Union’s bailout fund.

But economists caution that many details in the plan still have to be worked out, including the difficult task of deciding who will pay for it.

“With more questions than answers markets will be hungry for further details over coming weeks and until then it is difficult to see risk appetite stretching too far,” analysts at Credit Agricole CIB wrote in a research note.

This week, investors will likely turn their attention to the U.S.

A key jobs report for October, a Federal Reserve policy meeting and Fed Chairman Ben Bernanke’s quarterly news conference are all due.

“This month is going to be another watershed insight into whether we are looking at a low growth environment or something worse,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “To maintain the low growth environment view, the market is going to want to see positive employment growth.”

A report Thursday showed that the U.S. economy expanded at a solid 2.5 percent annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing.

But while the economy is growing, it may not be enough to generate many jobs. The U.S. unemployment rate has been stuck at 9.1 percent for three months. Analysts expect roughly 100,000 jobs to be added in October. Anything less could raise concerns that the economy may slow.

In currencies, the euro fell to $1.4034 from $1.4170 on Friday in New York. The dollar sprinted to 79.18 yen from 75.76 yen.

Benchmark crude for December delivery was down 96 cents at $92.36 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 64 cents to settle at $93.32 in New York on Friday.

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Thailand’s plan to pay its rice growers far above market rates is expected to push up prices for the staple that feeds almost half the world’s people as rice importing nations look to other countries for tightened supplies.

A new government in Thailand, the world’s biggest rice exporter, has promised growers higher prices for rice in a scheme that will take effect Oct. 7. It’s putting no limit on the amount of rice it will buy.

What’s good for Thai farmers, who have long complained of being shortchanged by middlemen, is proving less popular elsewhere in Asia. The effects of the rice policy are rippling through the region, where many countries are already struggling with fast rising food prices.

Thailand’s rice exporters say they will ship less overseas because they will be unable to compete with the price the government pays. That in turn will tighten the global rice market, forcing up the staple’s price in other countries.

The U.S. Department of Agriculture forecasts that Thailand’s rice exports will drop 20 percent to 8 million metric tons in 2012 because of the rice buying scheme. That could see Vietnam overtake Thailand as the No. 1 exporter.

“The rice prices in the global market will definitely escalate, since the supply from Thailand, the biggest exporter, is seeing a downturn,” said Witchuda Chummee, an analyst at Siam Commercial Bank’s Economic Intelligence Center in Bangkok.

“Using the Thai prices as a benchmark, other countries, like Vietnam, will likely increase their prices also.”

The Pheu Thai Party that swept to power in July 3 elections has said the government will pay farmers baht 15,000 ($500) per ton for unmilled paddy rice and baht 20,000 ($665) for unmilled jasmine rice. Before the election, unmilled paddy rice sold for baht 8,150 ($271) a ton and milled paddy rice sold for baht 13,000 ($432) a ton.

What’s causing particular angst for exporters is that the government intends to buy as much rice directly from growers as they want to sell.

“We will take as much as we can,” Commerce Minister Kittirat Na-Ranong told The Associated Press.

Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, said the international price for “white rice 5 percent” _ long grain white rice with a 5 percent broken rice component _ could reach $830 per ton “as soon as the scheme is fully implemented,” compared with the current market price of $613 per ton.

“The government’s price is too high and will definitely undermine the nation’s competitiveness in rice exporting,” said Chookiat. “If exporters cannot compete with the subsidized price, they may have to switch to trade rice of other origins.”

Elsewhere in Southeast Asia, Thailand’s move has underlined the importance of boosting local production and having a broad range of possible sources.

“This just shows how correct we are in pushing for self-sufficiency,” said Proceso Alcala, Agriculture Secretary for the Philippines, which is the world’s top rice importer.

The country’s National Food Authority is assessing likely demand for rice from other Southeast Asian countries for 2012 and subsequent years to get a clearer picture of whether Thailand can maintain high prices or if “natural market forces will also get them to reconsider the plan,” said its administrator Lito Banayo.

Banayo said if local rice growing targets are met, the Philippines would need to import only a million tons or less for 2012 _ about the same amount bought for this year’s stocks.

Sutarto Alimoeso, chief of Indonesia’s state logistics agency, said the Thai scheme is a challenge to Indonesian farmers to improve their productivity.

The agency known as Bulog is currently importing 300,000 tons from Thailand and 500,000 tons from Vietnam for stockpiles, Alimoeso said.

In anticipating higher rice prices, Alimoeso said Indonesia is arranging possible imports from India and Pakistan. Imports from Myanmar and Cambodia are also an option.

Thailand first introduced a rice subsidy scheme in 2004 during the government of Thaksin Shinawatra, who was ousted in a coup two years later following prolonged protests in the capital Bangkok against his alleged corruption and CEO-style rule. The scheme was criticized for graft and its high cost.

Kittirat, the Thai Commerce Minister, told lawmakers last month that the rice scheme is expected to cost less than baht 100 billion ($3.32 billion) a year and will result in losses for the government of less than baht 10 billion ($332 million) a year.

A 2010 study by Thailand Develop Research Institute, a nonprofit think tank in Bangkok, found that the earlier rice buying program caused losses of baht 19.1 billion ($628 million) for the government in 2005. It said the program was “plagued with corruption at all stages” and that most of the benefits did not go to the farmers.

The latest plan, however, enjoys strong support from farmers, whose votes helped Pheu Thai, led by Thaksin’s younger sister Yingluck Shinawatra, win government with a strong parliamentary majority in July elections.

“This program directly benefits Thai farmers. We will no longer be taken advantage of by middlemen,” said Wichien Puanglumjiak, a representative of the farmers’ network in central Thailand.

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China’s consumer prices moderated in August, helped by slower increases in food prices, opening the way for a possible easing of tight monetary policies to help ward off the impact of a global slowdown.

Consumer prices in the world’s second-largest economy rose 6.2 percent over a year earlier, cooling from a 37-month high of 6.5 percent in July, the National Statistics Bureau said Friday.

The data were in line with expectations, though still above the government’s 4 percent target for the year.

They appear to indicate that repeated interest rate hikes and other curbs meant to chill the overheated economy are taking hold. That could ease the dilemma Chinese leaders face in seeking to dampen politically sensitive living costs, while keeping economic growth on track as the U.S. and European outlook worsens.

Food prices, which comprise a large share of the consumer price index, climbed 13.4 percent, down from 14.8 percent in July.

A 29.3 percent surge in prices for meat and poultry products and 12.2 percent increase for staple grains kept food price increases still relatively strong.

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The Toronto stock market extended its rally to a second day, closing higher with help from gold stocks as fresh worries about the European debt crisis pushed bullion further into record territory.

The S&P/TSX composite index gained 88.61 points to 12,197.87 on top of a 438-point jump Tuesday.

However, it was another day of carnage on Wall Street as investors also turned their attention back to the weakening U.S. economy.

The Dow industrials plunged 519.83 points to 10.719.94. The Nasdaq composite index lost 101.47 points to 2,381.05 while the S&P 500 index lost 51.77 points to 1,120.76.

The Canadian dollar fell 1.64 to 100.52 cents US as a commitment by the U.S. Federal Reserve to keep rates ultra-low for another two years pushed back expectations of the Bank of Canada hiking rates later this year.

Gold ran up $41.30 to US$1,784.30 an ounce after crossing the US$1,800 level for the first time.

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People are buying homes at the weakest pace in 14 years.

Sales of previously occupied homes fell in June for a third straight month to a seasonally adjusted annual rate of 4.77 million, the National Association of Realtors said Wednesday.

This year’s pace is lagging behind the 4.91 million homes sold last year _ the fewest since 1997. In a healthy economy, people buy roughly 6 million homes per year.

Fewer first-time homebuyers are entering the market. Many can’t obtain a loan or meet larger down payment requirements.

Another problem is that a growing number of contracts are being canceled before sales are finalized, many because of lower appraisals that are scuttling loans. And the slowdown in hiring is making people think twice about taking on extra debt.

High unemployment, millions of foreclosures and tighter credit are likely to keep people from buying homes in the second half of the year, economists say. Even low home prices and cheap mortgage rates are unlikely to draw buyers to the market.

“Given the state of the job market, and some reluctance among banks to lend and households to borrow, this lackluster pace of sales is not too surprising,” said Alistair Bentley, economist at TD Economics.

First-time homebuyers, who are critical to a strong and stable housing markets, have shrunk to 31 percent of sales. That’s the fewest since January 2010.

Normally, first-time buyers make up about half of all home sales. And their purchases of low and moderately priced homes allow sellers to move up to pricier homes.

But the sluggishness of the U.S. economy appears to be weighing heavily on the minds’ of would-be homebuyers, analysts say. In June, the economy created 18,000 net jobs, the fewest in nine months. The unemployment rate rose to 9.2 percent.

Home sales have fallen in four of the past five years, forcing prices down in most markets. Declining home values have made people feel less wealthy, and as a result they are spending less cash advance companies. Consumer spending accounts for 70 percent of economic activity.

“What would change things for the better would be more-normal hiring, and the creation of incomes and spending that would result,” said Pierre Ellis, an analyst at Decision Economics.

Some sales are falling apart at the last minute. Roughly 16 percent of home deals were canceled last month. That’s four times the number in May and the highest level since such records began being kept more than a year ago. A sale isn’t final until a mortgage is closed.

Buyers have canceled purchases after appraisals showed that the homes were worth less than the buyers’ initial bids. Millions of foreclosures have made it harder to get accurate appraisals that all parties can agree on.

Foreclosures and short sales _ when a lender agrees to sell for less than what is owed on a mortgage _ made up about 30 percent of all home sales last month, up from about 10 percent in past years. And a wave of foreclosures are being held up, either by backlogged courts or lenders awaiting state and federal probes into troubled foreclosure practices.

Investors have targeted foreclosures and other deeply discounted properties. They accounted for 19 percent of sales in June.

The median sales price rose in June to $184,300, according to the Realtors’ group. It was mainly because of an annual post-spring bump that drove prices higher in the Northeast and West.

Sales were uneven across the country. In May, sales rose 0.5 percent in the West and 1 percent in the Midwest and fell 1.7 percent in the South and 5.2 percent in the Northeast.

The glut of unsold homes rose slightly in June to 3.77 million homes. At last month’s sales pace, it would take 9.5 months to clear those homes. Analysts say a healthy supply can be cleared in six months.

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The 15-year gravity-defying run of house prices in Toronto is at an end, according to a Star survey of leading economists and Canada