By Halia Pavliva Nov. 6 (Bloomberg) -- Platinum fell in New York as U.S. equities tumbled, adding to recession worries, and central banks in Europe cut interest rates, boosting the dollar. Palladium futures rose. U.S. equity indexes dropped on concern that earnings will suffer from an economic slump. European Central Bank President Jean-Claude Trichet wouldn't rule out more cuts to stimulate growth, after trimming borrowing costs today. The Bank of England slashed its benchmark interest rate to the lowest since 1955. The dollar jumped as much as 1.9 percent against the euro. ``Whenever the stock market stumbles lately it appears to effect precious metals in a negative manner, indicating that credit to the risk-investment community remains tight,'' Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in a report. Platinum futures for January delivery fell $41.70, or 4.7 percent, to $838.30 an ounce on the New York Mercantile Exchange. In October, the price plunged 19 percent, the fourth consecutive monthly decline. Palladium futures for December delivery gained $3.60, or 1.6 percent, to $222.60 an ounce. The most-active contract still is down 63 percent from this year's high of $600 on March 4. ``Deflation is in the air,'' said Ralph Preston, an analyst at Heritage West Futures Inc. in San Diego. ``Commodities are continuing to be the stepping stone of a firming dollar.'' The euro fell against the dollar, the yen and the pound after Trichet said Europe's economy has ``weakened significantly.'' The 15-nation currency slid as much as 1.8 percent against the dollar, the most this week, after the ECB cut its main refinancing rate by 50 basis points to 3.25 percent. Euro Declines The euro sank to $1.2731 at 3:08 p.m. in New York, from $1.2954 yesterday. The currency has plunged 21 percent against the dollar from a record $1.6038 on July 15. U.S. shares tumbled, with the Dow Jones Industrial Average losing as much as 5 percent and the Standard & Poor's 500 Index dropping as much as 5.2 percent. Major indexes in Europe and Asia also plunged. Platinum slid 44 percent in the past 12 months, while palladium declined 41 percent as global auto sales stalled. Platinum reached a record $2,308.80 an ounce in March as the dollar headed to a record low against the euro. ``Platinum and palladium prices are mixed as uncertainty dominates investor perceptions,'' Preston said. ``Look for continued consolidation until the dollar makes up its mind on whether to continue carving out new highs or reverse its multi- month course.'' Weakness Remains ``Palladium and silver still seem to be unusually strong, though basic economic forecasts remain very weak, with no safe market left,'' Perez-Santalla said in the report. Car manufacturers use about 60 percent of global platinum output, according to estimates by Johnson Matthey Plc, a London- based metals trader, refiner and researcher. U.S. car and light-truck sales plummeted 32 percent last month to the lowest since January 1991, led by General Motors Corp.'s 45 percent slide, as reduced access to loans and a weaker economy caused consumers to shun purchases. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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