* Global shares tumble on dour U.S., euro zone data
* Dollar rallies after weak U.S. retail sales data
* Government debt rallies on retail sales, BoE outlook
* Oil slips as stock losses outweigh inventory decline
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, May 13 (Reuters) - Stocks fell around the world
on Wednesday after reports of declining U.S. retail sales and
falling output in Europe dimmed hopes for a rapid economic
recovery, spurring demand for safe-haven assets like gold and
government debt.
The U.S. dollar rallied against most major currencies after
news of the unexpected drop in U.S. retail sales in April
reminded investors of the rocky road to recovery for a global
economy mired in its worst recession in decades.
Oil prices slid after earlier gains as the heavy losses on
Wall Street outweighed a government report showing a surprise
drop in U.S. crude and gasoline stockpiles.
Spot gold prices touched a six-week high above $930 an
ounce on buying by exchange-traded funds and increased interest
in the metal following the losses in equity markets.
"Green shoots of a global recovery were hit by a round of
frosty economic data today," said Vassili Serebriakov, a
currency strategist at Wells Fargo Bank in New York.
Major U.S. and European stock indices closed down more than
2.0 percent, while MSCI's all-country index <.MIWD00000PUS> was
off 2.3 percent at the close on Wall Street.
The Dow Jones industrial average <> was down 184.22
points, or 2.18 percent, at 8,284.89. The Standard & Poor's 500
Index <.SPX> was down 24.43 points, or 2.69 percent, at 883.92.
The Nasdaq Composite Index <> was down 51.73 points, or
3.01 percent, at 1,664.19.
The U.S. Commerce Department said retail sales slipped 0.4
in April after a 1.3 percent decline in March. []
Shares in Wal-Mart Stores Inc <WMT.N>, the world's biggest
retailer and a bellwether for the retail sector, fell 1.2
percent while Macy's Inc <M.N> fell 6.7 percent. The department
store chain stuck to its full-year outlook for a decline in
sales. The S&P retail index <.RLX> fell 3.3 percent.
European shares fell for a third straight session, led
lower by financials and mining stocks, notably Rio Tinto
<RIO.L>, on investor caution after recent strong gains.
Rio Tinto lost 10.6 percent amid speculation about a rights
issue.
The FTSEurofirst 300 <> index of top European shares
closed down 2.5 percent at 831.71 points, its lowest close
since May 1.
Weighing on sentiment was data showing euro zone industrial
production plummeted a record 20.2 percent in March from a year
ago, indicating first-quarter economic output may have shrunk
more than expected. Output fell 2.0 percent from February.
[]
The Eurostat data offered little cause for optimism about
economic recovery as some business surveys have suggested,
while the Bank of England said Britain's recovery would be
slower than previously forecast. []
U.S. crude <CLc1> fell 83 cents to settle at $58.02 a
barrel, off a six-month peak above $60 hit earlier this week.
London Brent <LCOc1> fell 60 cents to $57.34.
"The amazing run over the last months on building crude
stocks had to come to an end," said Phil Flynn, analyst at
Alaron Trading in Chicago.
Oil prices have been tracking equities markets closely in
recent months as traders look to stocks for signs of an
economic recovery that could lift ailing world fuel demand.
Crude inventories fell by 4.7 million barrels, the U.S.
government said, a day after the American Petroleum Institute
reported a drop in stockpiles. [] Analysts had forecast
stocks would rise.
Adding to losses, the Organization of Petroleum Exporting
Countries forecast that world oil demand in 2009 would be even
weaker than previously thought. The group said members relaxed
production slightly in April. []
The dollar, which rose from four-month lows, was up against
a basket of major currencies, with the U.S. Dollar Index <.DXY>
up 0.33 percent at 82.571. Against the yen, the dollar <JPY=>
was down 1.16 percent at 95.29.
The euro <EUR=> fell 0.38 percent at $1.3591.
"The 'green shoots' rally was ready for a bit of a
correction and we already started to see that overnight. This
report is likely going to feed into it," said Michael Woolfolk,
senior currency strategist at Bank of New York Mellon in New
York.
"This naturally gives the bond market a chance to rally."
The benchmark 10-year Treasury note <US10YT=RR> rose 18/32
in price to yield 3.11 percent. The 30-year long bond
<US30YT=RR> added 41/32 in price to yield 4.09 percent.
U.S. gold futures for June delivery <GCM9> settled up $2 at
$925.90 an ounce in New York.
Overnight in Asia, Japan's Nikkei share average <>
edged up 0.5 percent in choppy trade. The MSCI index of Asia
Pacific shares traded outside Japan <.MIAPJ0000PUS> was down
0.1 percent at Wall Street's close, after rising 0.8 percent
earlier in the session.
(Reporting by Leah Schnurr, Richard Valdmanis, Gertrude
Chavez-Dreyfuss, Burton Frierson and Frank Tang in New York;
Jamie McGeever in London and Peter Starck in Frankfurt; writing
by Herbert Lash; Editing by Kenneth Barry)
