* Global stocks slip on nagging worries about economy
* Oil falls below $61 a barrel on recovery doubts
* Bonds gain on equity sell-off, recession worries
* Dollar and yen climb broadly; earnings eyed
(Updates with U.S. markets activity, changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, July 8 (Reuters) - Unease over the economic
outlook, supported by an IMF report, pulled equity markets and
commodity prices lower on Wednesday and bolstered safe haven
assets like the U.S. dollar, yen and government debt.
A pall has fallen over financial markets as investors find
more reasons to see economic malaise rather than growth. Crude
oil <CLc1> slid almost 4 percent to below $61 a barrel and spot
gold <XAU=> fell almost 2 percent to less than $910 an ounce.
U.S. Treasury debt prices jumped as another sell-off on
Wall Street intensified demand for government bonds, with a
strong auction of 10-year notes showing appetite for government
debt was intact. []
Euro zone government bonds also pushed higher, with Bund
futures marking a two-month high after European equities
slumped to a 10-week low on renewed risk aversion. Economic
recovery in the bloc appeared some way off. []
The dollar and yen climbed broadly amid unease about the
global economy as investors awaited the start of U.S. corporate
earnings season. []
Investors found little to cheer. In an update of its World
Economic Outlook, the International Monetary Fund said the
global economy is likely to contract 1.4 percent this year,
more than the 1.3 percent decline it projected in April.
[]
"It is all part of a wave of a general sell-off in most
asset classes," said Joel Crane, an analyst at Deutsche Bank.
"At least for the rest of the quarter prices will likely
drift a bit lower," Crane said, discussing industrial metals.
Anxiety about the economy and health of corporate profits
weighed on U.S. equities. Alcoa Inc <AA.N>, the first Dow
component to report earnings, is expected to post its third
consecutive quarterly loss after markets close.
Energy shares declined in tandem with crude oil prices,
which fell on U.S. government weekly data that showed gasoline
stocks had risen by 1.9 million barrels, more than expectations
for a 600,000 barrel increase. []
In addition distillate stocks, including diesel, climbed
3.7 million barrels, compared with an expected two million
barrel rise, to their highest level in nearly 25 years.
[]
Exxon Corp <XOM.N> was the biggest drag on the Dow, off 1.3
percent.
Shortly after 1 p.m., the Dow Jones industrial average
<> was down 43.31 points, or 0.53 percent, at 8,120.29. The
Standard & Poor's 500 Index <.SPX> was down 8.44 points, or
0.96 percent, at 872.59. The Nasdaq Composite Index <> was
down 13.00 points, or 0.74 percent, at 1,733.17.
European shares fell for the fifth straight session as
investors fretted over further signs that the pace of economic
recovery will not be fast. []
The FTSEurofirst 300 <> index of top European shares
closed 1.1 percent lower at 817.12 points. The FTSE 100 <>
closed down 46.77 points at 4140.23, its third day of losses.
"The trend at the moment is definitely in the southerly
direction, unfortunately. Despite IMF talk that the recession
is on its way (out), people remain unconvinced," said Mark
Priest, senior equities trader at ETX Capital.
A sixth straight decline in oil prices would be the longest
losing streak for crude since mid-December.
An OPEC report predicting it could take years for demand
for its crude to recover from the financial crisis added to
bearish sentiment. []
U.S. light sweet crude oil fell $2.38 to $60.55 a barrel.
Spot gold prices <XAU=> fell $15.10 to $908.20 an ounce.
Worries over a protracted recession have boosted appetite
for $43 billion in Treasury coupon securities at two auctions
earlier this week, investors said. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
24/32 in price to yield 3.36 percent. The 2-year U.S. Treasury
note <US2YT=RR> was up 2/32 in price to yield 0.93 percent.
The euro fell more than 3 percent against the yen to its
lowest since mid-May, as investors shunned risk and unwound
carry trades. The euro fell to as low as 127.05 yen.
The euro <EUR=> was down 0.40 percent against the dollar at
$1.3865.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 0.03 percent at 80.684.
Against the yen, it <JPY=> was down 2.9 percent at 92.07.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> dropped 1.6 percent to a two-week low, while
Japan's Nikkei <> slid for a sixth straight trading day,
off 2.4 percent.
(Reporting by Rodrigo Campos, Richard Leong, Ellen Freilich
and Nick Olivari in New York; Martina Fuchs, Christopher
Johnson, David Brett, Barbara Lewis, Michael Taylor and Kylie
MacLellan in London; writing by Herbert Lash, Editing by Chizu
Nomiyama)
