GLOBAL MARKETS-Stocks slip, dollar gains on rethink of Fed plan

                                

                                
 * Global stocks slip as investors reassess Fed's big move
                                
 * Dollar extends gains vs euro, yen on US jobless claims
                                
 * Oil rebounds on lower-than-expected U.S. inventories
                                
 * Jobless data no boon to bonds; 30-year auction looms
 (Adds close of European markets)
                                
 By Herbert Lash
                                
 NEW YORK, Nov 10 (Reuters) - The dollar hit a one-month
high on Wednesday after data pointed to an improving U.S. labor
market while global stocks slipped as investors worried about
the Federal Reserve's plans to reinvigorate the U.S. economy.
                                
 The dollar extended gains as higher U.S. bond yields
prompted traders to reduce bets against the greenback. For
details, see [ID:nN10213278].
                                
 Investors have had second thoughts about the Fed's move
announced last week to buy $600 billion in Treasury debt
through next June, a move whose ramifications they don't fully
understand.
                                
 Euphoria that was driven by expectations about the Fed's
plans had lifted the benchmark Standard & Poor's 500 Index
about 16 percent over the past two months but has faded as
concerns mount about the action, known as quantitative easing.
                                
 Some investors question whether the Fed might buy less than
the original amount of bonds, while others are concerned the
increased liquidity has propelled commodity prices higher,
which could induce a harmful bout of inflation.
                                
 "The initial liquidity rush of the last three months has
seemed to have reached its crescendo," said Chad Morganlander,
portfolio manager at Stifel Nicolaus & Co in Florham Park, New
Jersey. "Investor sentiment around the actions of the Fed have
seem to have grown remorseful."
                                
 Fears about Ireland's high debt burden led investors in
Europe to seek shelter in German bunds, which also helped push
the euro lower against the dollar for a fourth straight day.
                                
 Oil prices, meanwhile, rose above $87 per barrel after U.S
weekly oil data showed a surprise fall in crude inventories and
larger-than-expected drops in oil product stocks.
                                
 European shares fell from two-year highs hit a day earlier
on concerns about euro zone debt problems and a sharp drop in
Natixis <CNAT.PA>, which missed profit forecasts and helped
drag down banks.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended 0.7 percent lower at 1,109.61 points.
                                
 "Over the recent days and weeks, equity markets have
partially ignored the rising tensions within the euro zone and
today the focus is more on this after one of the clearing
companies increased the margin requirements for Irish bonds,"
said Tammo Greetfeld, equity strategist at UniCredit.
                                
 The euro <EUR=> fell 0.38 percent at $1.3724, while against
the yen, the dollar <JPY=> rose 1.05 percent at 82.63.
                                
 The dollar rose against major currencies, with the U.S.
Dollar Index <.DXY> up 0.63 percent at 77.93.
                                
 MSCI's all-country world index <.MIWD00000PUS> slid 0.8
percent, although Wall Street hovered near break-even
.
                                
 The Dow Jones industrial average <.DJI> was down 35.20
points, or 0.31 percent, at 11,311.55. The Standard & Poor's
500 Index <.SPX> was down 1.88 points, or 0.15 percent, at
1,211.52. The Nasdaq Composite Index <.IXIC> was up 0.34
points, or 0.01 percent, at 2,563.32.
                                
 A decline in initial U.S. jobless claims had some analysts
suggesting the American economy was starting to gain traction
after months of sluggish growth. [ID:nN0986897]
                                
 Economic data last week showed surprisingly strong U.S.
payroll growth in October and an improved services sector.
                                
 Gold earlier rose to around $1,400 an ounce, recovering
from its choppiest trading session in six months the day
before, as concerns about euro zone debt reignited safe-haven
buying. [ID:nLDE6A90S9]
                                
 Spot gold prices <XAU=> rose $6.26 to $1,395.90.
                                
 FIVE-YEAR NOTE FALLS
                                
 The 5-year U.S. Treasury note <US10YT=RR> was down 10/32 in
price to yield 1.325 percent.
                                
 U.S. crude futures for December <CLc1> rose 92 cents to
$87.64. ICE Brent <LCOc1> rose 6 cents to $88.93 per barrel.
                                
 The American Petroleum Institute said late on Tuesday that
U.S. crude stockpiles dropped last week, defying expectations.
[API/S]
                                
 Japan's Nikkei average <.N225> closed up 1.4 percent, led
by exporters, who were among the chief beneficiaries of the
dollar's rise. The MSCI index of Asian shares outside of Japan
<.MIAPJ0000PUS> fell 0.7 percent.
                                
 President Barack Obama responded to widespread criticism that the United States, through the Fed, is deliberately
weakening the dollar, saying a strong U.S. economy was vital to
the global recovery. [ID:nN09125341]
 (Reporting by Gertrude Chavez-Dreyfuss and Emily Flitter in
New York; Christopher Johnson and Amanda Cooper in London;
Writing by Herbert Lash; Editing by Kenneth Barry)