US Federal Reserve chairman Ben Bernanke warned yesterday that the US economy was headed toward an extended period of difficulty, despite worldwide efforts to stabilize the financial markets.

"Broader economic recovery will not happen right away," Bernanke said in a speech to the Economic Club of New York, even if financial markets stabilize "as we hope they will."

A broad slowdown in economic activity was underway by the end of September, according to the latest report on economic activity, known as the Beige Book, released by the Federal Reserve on Wednesday. Consumer spending and factory activity were slow in most regions.

Dow Jones industrials tumbled 733 points, its second-largest point loss ever. Risk appetite, which was boosted in previous sessions by financial rescue plans, faded quickly on Wednesday in foreign exchange market.

The euro bought 1.3521 dollars in late New York trading compared with 1.3650 dollars it bought late Tuesday. The pound fell to 1.7328 dollars from 1.7437 dollars.

The dollar fell to 1.1361 Swiss francs from 1.1388 Swiss francs, and fell to 100.79 Japanese yen from 101.88 Japanese yen. It rose to 1.1871 Canadian dollars from 1.1616 Canadian dollars.