* Earnings worries hit stocks, Wall Street faces mixed start
* Europe flat, emerging stocks fall 2 percent
* Oil briefly dips below $59 barrel
By Jeremy Gaunt, European Investment Correspondent
LONDON, July 13 (Reuters) - World shares fell on Monday,
with particularly heavy losses in emerging markets, as investors
fretted about a coming wave of corporate earnings and confidence
in a rapid global economic recovery faded.
Oil dipped briefly below $59 a barrel in a sell-off prompted
by concern over a tailing off of demand if the economy stutters
again. <CLc1>
Wall Street looked set for a mixed opening.
"I don't think we will see an economic recovery this year
and ... earnings estimates are still too high, so there is room
for disappointment," said Philippe Gijsels, senior equity
strategist at Fortis Bank, in Brussels.
World stocks as measured by MSCI <.MIWD00000PUS> lost close
to half a percent. The FTSEurofirst 300 <> index of top
European shares hit an 11-week low but later traded flat.
European sentiment was poor despite Dutch conglomerate
Philips Electronics <PHG.AS> surprising the market with a return
to profit in the second quarter and by saying it was hopeful of
an upturn in business in the second half of 2009.
Emerging markets suffered more acutely, taking the MSCI
sector index <.MSCIEF> down 2 percent. The sector has been the
big winner as investors have banked on a recovering economy, so
would likely unwind quicker if a major correction set in.
So far in the U.S. earnings season, two major U.S. companies
had reported, giving investors mixed signals. Bellwether Alcoa
<AA.N> reported a third consecutive quarterly loss, but beat
estimates; oil major Chevron <CVX.N> warned that second-quarter
earnings would be hit by a decline in U.S. refining margins.
Among U.S. companies reporting this week are Goldman Sachs
<GS.N>, JP Morgan <JPM.N>, Bank of America <BAC.N>, Citi <C.N>,
IBM <IBM.N>, Google <GOOG.O>, Intel <INTC.O> and GE <GE.N>.
European reports will come from Nokia <NOK1V.HE>, Alstom
<ALSO.PA>, Novartis <NOVN.VX> and Pernod Ricard <PERP.PA>.
YEN RISES
The yen rose broadly, hitting a five-month high against the
dollar and an eight-week high against the Australian dollar as
concern over upcoming U.S. corporate earnings heightened
investors' aversion to risk.
Commodity-based currencies, particularly the Australian and
New Zealand dollars, were hit hard by the falling oil price.
"Risk aversion trades are coming back into the market again
and the yen is the main currency to benefit from that," CMC
Markets analyst James Hughes said.
"This week there is heavy focus on the U.S. earnings seasons
and investors will want to see that any recovery for major
companies is revenue-based and not cost-cutting based," he added.
The dollar hit a five-month low against the yen of 91.73 yen
on electronic trading platform EBS. It was later down 0.5
percent at 92.07 yen <JPY=>.
The euro fell 0.3 percent against the yen to 128.61 yen
<EURJPY=>, though it edged up 0.2 percent against the dollar at
$1.3957 <EUR=>.
On euro zone government bond markets, the interest
rate-sensitive two-year Schatz yield <EU2YT=RR> was steady at
1.20 percent.
(Additional reporting by Atul Prakash and Jessica Mortimer;
editing by Patrick Graham)
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