US stocks fell more than 1 per cent as an unexpectedly large increase in claims for unemployment benefits in the United States and a much wider-than-expected US trade deficit added to the economic concerns.

The Dow Jones industrial average shed 205.7 points or 1.68 per cent to 12,007.39, while the Standard & Poor's 500 Index fell 21.98 points or 1.67 per cent to 1,298.04. The Nasdaq Composite Index was down 45.63 points or 1.66 per cent at 2,706.09.