Global stocks and commodity prices slid yesterday after Friday's fraud charges against Goldman Sachs rattled markets around the world while lifting the US dollar as investors sought safety.

Concerns about a delay in planned talks in Greece with the European Union and International Monetary Fund over a possible €45 billion bailout added to widespread risk aversion. Greek bond prices and bank shares both fell.

Investors are keen to see Athens activate the deal but the ash cloud caused by the Icelandic volcano disrupted travel in Europe and helped delay the Greek debt talks.

Copper fell to three-week lows and crude oil slipped about 2.7 per cent to around $81 a barrel on heightened risk aversion in the wake of the charges against Goldman - a leading commodities player - and as European flying restrictions curbed jet fuel use.

The restrictions on European flights, which have stranded passengers around the world and halted freight flights, also took a heavy toll on prices of shares of airliners.

Gold also fell on the Goldman news, although it recovered from two-week lows as some investors sought the metal as a haven.

Investors ignored news that a gauge of the US economy's prospects rose to a record high in March, suggesting a steady recovery, the Conference Board, a private research group, said of its index of leading economic indicators.

Some investors said the fraud charges against Goldman, which the bank has called "completely unfounded," were isolated to the bank and did not affect the economic recovery. But the charges may give new life to efforts by the Obama Administration and Democrats to reform financial regulation.

"This Goldman Sachs affair is certainly something that is keeping investors a bit wary because it could become a key for more stringent regulations," said Luc Van Hecka, chief economist at KBC Securities.

"This is clearly a risk-averse market," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.

Emerging market stocks as measured by MSCI fell 2.3 per cent and its all-country world index only shed 1.1 per cent.

Wall Street fell after trading little changed earlier after Citigroup Inc.'s reported its best results since 2007.

Citigroup shares rose 3.1 per cent after it posted a first-quarter profit of $4.43 billion as losses from bad loans declined, beating analysts' estimates.

At 12.30 p.m., the Dow Jones industrial average was down 18.06 points, or 0.16 per cent, at 11,000.60. The Standard & Poor's 500 Index was down 6.06 points, or 0.51 per cent, at 1,186.07. The Nasdaq Composite Index was down 25.32 points, or 1.02 per cent, at 2,455.94.

European stocks fell, led by energy, food groups and airline stocks, on the disruptions to air travel and transportation caused by the Icelandic volcano.

Greek bank shares fell 2.6 per cent on worries over the impact of widening yield spreads and austerity measures on the weakening economy.

The FTSEurofirst 300 index of top European shares closed 0.7 per cent lower at 1,088.04 points.

Airliners including British Airways, Lufthansa, Iberia, and Air France-KLM all fell, while Eurotunnel rose 3.5 per cent as travellers sought alternative routes.

US-based airline shares also fell, with AMR Corp., the parent of American Airlines, and UAL Corp , operator of United Airlines, each down more than 4.5 per cent.

The STOXX Europe 600 banking index fell 0.9 per cent.

European and IMF officials will discuss the possibility of more austerity measures for Greece, a top EU official was quoted as saying yesterday.

The premium investors demand to buy Greek rather than German government debt ballooned to the highest since Greece adopted the euro, while the dollar and yen gained as investors sought the safety of the stable but low-yielding currencies.

The Greek/German 10-year government bond yield spread hit a euro lifetime high of 474 basis points, around 31 points wider than Friday's settlement.

US Treasuries prices fell, though the dollar gained on safe-haven buying. The benchmark 10-year US Treasury note was down 3/32 in price to yield 3.78 per cent.

The dollar was up against a basket of major currencies, with the US Dollar Index up 0.36 per cent at 81.117.