GLOBAL MARKETS-Stocks fall after new Japan earthquake

                                
  
                                
 * ECB raises rates, euro weaker
                                
 * Equities fall after strong earthquake in Japan
                                
 * Gold, corn hit new record highs before backing off
                                
(Updates prices)
                                
 By Leah Schnurr
                                
 NEW YORK, April 7 (Reuters) - Global equities fell after a
strong aftershock rocked Japan and the euro fell against the
dollar as the European Central Bank raised rates but signaled
it was not necessarily the start of a round of hikes.
                                
 U.S. and European stocks fell after the earthquake
measuring 7.4 shook northeast and eastern Japan. A tsunami
warning was issued for the northeastern coast but later lifted.
For details, see [ID:nL3E7F72Y2]
                                
 European stocks ended down 0.2 percent and the dollar
extended losses against the yen. U.S.-dollar denominated Nikkei
futures <NKc1> were down 1.8 percent. Japan is the world's
third-largest economy and investors feared the new quake could
harm the global recovery.
                                
 "Right now I'm waiting to see the extent of the damage,
though I've been picking through some stocks to see which could
be impacted by disruptions," said Tim Hartzell, who oversees
$300 million as chief investment officer for Houston-based
Sequent Asset Management.
                                
 Hartzell, whose fund invests in Japanese stocks through
exchange-traded funds, said he might buy on weakness. "I'm
looking at auto manufacturers, and I'm definitely looking to
buy Honda if it gets cheap enough," he said.
                                
 European shares had earlier gained after Portugal's request
for aid fostered hopes the region's debt crisis will be
staunched. The pan-European European FTSEurofirst 300 stock
index <.FTEU3> was down 0.2 percent. Portugal's stock market
bucked the trend, with the PSI 20 <.PSI20> index up 1.2
percent.
                                
 The Dow Jones industrial average <.DJI> slipped 41.97
points, or 0.34 percent, to 12,384.78. The Standard & Poor's
500 Index <.SPX> lost 3.84 points, or 0.29 percent, to
1,331.70. The Nasdaq Composite Index <.IXIC> was off 3.74
points, or 0.13 percent, to 2,796.08.
                                
 World stocks as measured by MSCI <.MIWD00000PUS> were off
0.4 percent.
                                
 RATE HIKE
                                
 The ECB raised rates by 25 basis points to 1.25 percent to
counter firming inflation pressures. ECB President Jean-Claude
Trichet said it was not necessarily the start of a series of
similar steps, disappointing some who had expected a more
hawkish tone. [ID:nLDE7351QH]
                                
 "This makes the ECB the first major developed economy
central bank to hike rates, and the decision will cement its
reputation as a single-minded inflation fighter," said ABN Amro
economist Nick Kounis.
                                
 "The hike is unwelcome for peripheral countries, but
arguably the core member states were in need of this move
already some time ago. In that sense, the timing of the
increase is a balancing act, which is part and parcel of the
one-size-fits-all monetary policy," he added.
                                
 The euro <EUR=> was down 0.5 percent on the day at $1.4268,
off a more than 14-month high of $1.4350 touched on Wednesday.
Spot gold <XAU=> hit a new record at $1,464.80 an ounce
following Trichet's comments before easing back to trade little
changed.
                                
 It was the first rate increase since 2008 and followed a
day after Portugal's caretaker government requested European
Union aid at the urging of leading bankers. They wanted a
bailout to help the economy and safeguard its banking system.
                                
 Portugal said it will make the formal request for aid later
on Thursday. The rescue package could reach 85 billion euros
($122 billion). [ID:nLDE7361H1]
                                
 Spain vowed it would not follow Portugal in seeking a
bailout. A successful Spanish bond auction suggested markets do
not fear contagion at the moment. [ID:nLDE7360Y7]
                                
 Investors got more signs of a firming labor market as new
U.S. claims for unemployment benefits fell slightly more than
expected last week. Other data showed March was not as bad as
expected for many U.S. retailers even in the face of higher
gasoline prices. [ID:nN0784911] [ID:nN07294366]
                                
 Among commodities, spot gold was down 0.1 percent at
$1,456.14 an ounce after hitting a new peak. Chicago corn
futures <Cc1> reached a fresh all-time high at $7.73-1/4 before
unofficially ending lower ahead of the USDA's April
supply/demand report early on Friday.
                                
(Additional reporting by Nick Olivari and Ryan Vlastelica in
New York, Lucia Mutikani in Washington; Editing by Andrew Hay
and Diane Craft)