* Global stocks fall as weak US data spurs recovery fears
* Oil slips more than 3 pct to $77 a barrel demand worries
* U.S. dollar gains as stocks slide after Thursday's rally
* Government debt jump as mixed data fuels recovery doubts
(Updates with close of U.S. markets)
By Herbert Lash and Al Yoon
NEW YORK, Oct 30 (Reuters) - Crude prices fell and U.S.
stocks slid hard on Friday after reports cast doubt on the
economy's recovery and questions about Citigroup Inc <C.N>
sparked a sell-off in U.S. financial shares.
Havens like U.S. Treasuries and the U.S. dollar shot higher
while assets seen as riskier, such as stocks and oil, plunged.
A key gauge of Wall Street angst -- the CBOE Volatility
Index <.VIX> -- jumped almost 24 percent in its biggest
single-day spike since October 2008.
The slide in risk appetite pushed the Japanese yen sharply
higher and pulled down higher-yielding currencies linked to
commodities, including the Australian and New Zealand dollars.
The sell-off on Wall Street erased Thursday's rally, the
best one-day gain by U.S. equities in three months, after a
better-than-expected report on U.S. gross domestic product.
The 2.5 percent drop in the Dow was its worst one-day
percentage loss since July, while the Nasdaq racked up its
worst weekly percentage decline -- 5.1 percent -- since March.
For the month, the Dow was unchanged, the S&P 500 fell 2
percent and the Nasdaq slipped 3.6 percent. Both the S&P 500
and Nasdaq snapped seven straight months of gains.
Citigroup shares tumbled 5.1 percent after accounting
expert Robert Willens said the bank was likely to have a $10
billion fourth-quarter charge on its deferred tax assets.
[]
The KBW banks index <.BKX> fell 4.95 percent.
"Confidence still strikes me as shockingly low," said Jeff
Kleintop, chief market strategist at LPL Financial in Boston.
"Consumers are still very pessimistic, and that is evident in
individual investors' hesitancy to embrace this rally."
U.S. consumers cut spending last month while sentiment
turned gloomier in October, data showed. Another report showed
factory activity in the U.S. Midwest expanded for the first
time in more than a year, but employment conditions worsened.
[]
The Dow Jones industrial average <> fell 249.85 points,
or 2.51 percent, to end at 9,712.73. The Standard & Poor's 500
Index <.SPX> slid 29.92 points, or 2.81 percent, to 1,036.19.
The Nasdaq Composite Index <> lost 52.44 points, or 2.50
percent, to close at 2,045.11.
With the economy still fragile a year after the global
credit crisis, the Federal Reserve will likely stick to its
easy borrowing policy and near-zero interest rate target after
policymakers convene next week, analysts said.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
30/32 in price to yield 3.38 percent.
The dollar climbed versus a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.59 percent at 76.367.
The euro <EUR=> fell 0.76 percent to $1.472. Against the
yen, the dollar <JPY=> declined 1.43 percent at 90.10.
U.S. crude for December delivery <CLc1> fell $2.87 to
settle at $77.00. London Brent crude <LCOc1> lost $2.84 to
settle down $75.20.
New York gold futures ended lower, but losses were limited
on flight-to-quality buying.
Gold for December delivery <GCZ9> settled down $6.70 at
$1,040.40 an ounce in New York.
The pan-European FTSEurofirst 300 <> index of top
shares posted its biggest monthly decline in eight months.
The FTSEurofirst 300 declined 2.11 percent at 976.46.
Asian stocks bounced back from their biggest drop in two
months. The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> rose 2 percent, but later pared gains, up about
0.9 percent. The Nikkei <> in Tokyo climbed 1.5 percent.
(Additional reporting by Leah Schnurr and Chuck Mikolajczak;
Editing by James Dalgleish and Diane Craft)
