* Spain's takeover of a savings bank adds to debt jitters
* Euro falls sharply; U.S. data adds to dollar strength
* Dow drops 0.4 pct, European shares slide for 4th session
(Updates with U.S. markets open)
By Walter Brandimarte
NEW YORK, May 24 (Reuters) - The euro dropped about 1.5
percent on Monday and global stocks seesawed after Spain's
takeover of a savings bank reminded investors of Europe's
ongoing debt problems.
Gold prices rose more than 1 percent on renewed appetite
for safe-haven assets but emerging market stocks remained in
positive territory, supported by rising oil prices.
Europe's debt jitters grew as investors returned from the
weekend with news Spain's central bank had taken over savings
bank CajaSur after its planned merger with another of the
country's small lenders failed. []
CajaSur will now have access to Spain's bank bailout fund.
Analysts worry other banks could require public funds at a time
when much of Europe is struggling with massive deficits.
"People are going into safety. Things are not going to
change overnight," said George Goncalves, head of U.S. interest
rate strategy with Nomura Securities International in New
York.
The Dow Jones industrial average <> fell 38.40 points,
or 0.38 percent, to 10,154.99, while the Standard & Poor's 500
Index <.SPX> was down 1.37 points, or 0.13 percent, at
1,086.32. The Nasdaq Composite Index <> rose 11.78 points,
or 0.53 percent, to 2,240.82.
European trading was thin due to a religious holiday, but
most markets were open. The FTSEurofirst 300 <> was up
0.33 percent, after sliding as much as 0.7 percent earlier.
Plans outlined by British finance minister George Osborne
and Treasury minister David Laws on Monday to cut 6.25 billion
pounds ($9 billion) of government spending generally hurt
sentiment, traders said.
Global stocks as measured by MSCI <.MIWD00000PUS> were down
0.2 percent, adding to last week's 4.8 percent loss on worries
about a slowing global economy and stresses in the euro zone.
But emerging markets stocks <.MSCIEF> rose 0.7 percent, as
rising prices of oil and other raw materials supported the
outlook for commodity-exporting countries.
U.S. crude oil futures edged up in choppy trading as some
analysts said the market was oversold, but concerns about
Europe curbed a sharp recovery in prices. The oil contract for
July <CLN0> was up 0.51 percent, at $70.40 a barrel.
EURO PLUNGES AGAIN
The euro fell broadly on Monday, pulling back from last
week's gains, as persistent concerns about the euro-zone debt
situation threatened the future of the single currency.
The euro <EUR=> was down 1.54 percent at $1.2376. Last
week, it reached a four-year low of 1.2143.
Data showing U.S. existing home sales rose more than
expected in April briefly pushed the euro to session lows
against the dollar at $1.2345, according to EBS data.
[]
"Despite the modest rebound towards the end of last week,
we expect to see further EUR/USD downside ahead as the euro
zone fiscal deficit, public debt, and structural issues remain
unresolved despite recent policy initiatives," UBS analysts
said in a note.
As aversion to risk rose, spot gold prices <XAU=> climbed
1.06 percent to $1,187.60. Benchmark 10-year U.S. Treasury
notes <US10YT=RR> rose 8/32 in price, with the yield at 3.2069
percent.
