* MSCI world equity index down 0.6 percent at 314.86
* Disappointing Lehman Q3 results hit risky assets
* Wall Street set for a weaker open; yen rises
By Natsuko Waki
LONDON, Sept 10 (Reuters) - World stocks fell on Wednesday
while safe-haven government bonds and the yen rose after U.S.
investment bank Lehman Brothers <LEH.N> disappointed investors
with a bigger-than-expected quarterly loss.
Lehman, a casualty of the credit crunch, posted a
preliminary quarterly loss of $5.92 a share, compared with
Reuters Estimates of a loss of $3.43.
The bank also said it would spin off its commercial real
estate assets into a new, separate public company, adding it is
examining all strategic alternatives [].
Lehman's announcement offered the latest piece of negative
news for risky assets. The market correction of the past 12
months has weighed on investor sentiment and threatened to kick
major economies into recession.
"Overall, the deleveraging will continue, and if that's the
case, more assets will have to be written down further and
credits will remain tight. All that doesn't spell well for the
stock market," said Lou Brien, market strategist at DRW Trading
in Chicago.
The FTSEurofirst 300 index <> fell 1.4 percent while
the MSCI main world equity index <.MIWD00000PUS> lost 0.7
percent, approaching last week's two-year low.
U.S. stock futures <SPc1> were down 0.4 percent, indicating
a firmer open on Wall Street later.
Lehman shares erased early gains to trade lower in
pre-market dealings, also coming under pressure after its talks
to raise fresh capital from Korean Development Bank collapsed
earlier.
"Lehman's meltdown won't probably be the last negative
episode of this credit crisis," said Christian Jimenez,
president of Imene Investment partners in Paris.
"The consequences of the troubles in the banking system will
continue to drag the economy, and stocks will stay in the
doldrums for a while before we see any durable rebound."
DOLLAR RISES
After dipping in and out of positive territory for most of
the session, the dollar <.DXY> rose 0.2 percent against a basket
of major currencies, having hit a one-year high earlier this
week.
The dollar has been benefiting from expectations that growth
outside the United States is deteriorating and interest rates
will fall, especially in Europe.
The low-yielding yen rose 0.1 percent to 106.78 per dollar
<JPY=>, while the December bund future turned positive to trade
up 12 ticks <FGBLc1>.
Emerging sovereign spreads <11EMJ> widened 4 basis points
while emerging stocks <.MSCIEF> fell 1.8 percent to a fresh
18-month low.
U.S. light crude <CLc1> rose 0.3 percent to $103.62 a
barrel, rebounding from Tuesday's five-month low after OPEC
agreed to an unexpected production cut.
Gold <XAU=> slipped to $771.45 an ounce.
