* Global stocks slide on concerns about euro zone growth
* Oil falls below $69 barrel as Europe debt worries fester
* Bonds rally as U.S. jobless jump spurs flight to safety
* Euro retains selling bias, falls 1.0 percent vs dollar
(Updates with open of U.S. markets, adds byline, changes
dateline, previous LONDON)
By Herbert Lash and Claire Milhench
NEW YORK/LONDON, May 20 (Reuters) - The euro and global
stocks fell on Thursday, with U.S. stocks now down 10 percent
from this year's highs on worries over Europe's debt crisis and
how it will crimp world economic growth.
Crude oil fell below $69 a barrel to nearly an eight-month
low on concerns about weak demand, while safe-haven U.S.
government debt prices soared as falling equity markets and an
unexpected jump in new U.S. jobless claims drove a flight to
safety. For details see: [] []
Fears that other euro zone countries will follow Germany's
move to ban short selling in some stocks and bonds pushed
European shares sharply lower. []
Interbank dollar and euro funding costs rose, with a key
dollar lending rate rising to a 10-month high, as demand for
the U.S. currency remained solid in a jittery market.
[]
"There's still underlying concerns about the European
economy and the potential adverse impact on banks going
forward," said Nick Stamenkovic, strategist at RIA Capital
Markets in Edinburgh. "Everybody is shying away from the euro
on concerns about the economy."
The euro <EUR=> was down 0.63 percent at $1.2349.
MSCI's all-country world equity index <.MIWD00000PUS> fell
2.7 percent, while its emerging markets index <.MSCIEF> was off
3.1 percent.
In morning trading, the Dow Jones industrial average <>
was down 204.66 points, or 1.96 percent, at 10,239.71. The
Standard & Poor's 500 Index <.SPX> was down 24.85 points, or
2.23 percent, at 1,090.20. The Nasdaq Composite Index <>
was down 53.35 points, or 2.32 percent, at 2,245.02.
The S&P 500 slipped into negative territory for the year on
Wednesday and marked an intraday correction of more than 10
percent from its 2010 closing high on April 23.
German 10-year government bond yields hit a record low and
euro zone government bond futures extended gains to a fresh
session high after U.S. labor market data suggested the
economic recovery has hit a stumbling block.
The number of U.S. workers filing new applications for
unemployment insurance unexpectedly rose last week for the
first time since early April, the Labor Department said.
[]
Initial claims for state unemployment benefits increased
25,000 to a seasonally adjusted 471,000 in the week ended May
15, the highest level since the week ended April 10.
"Given the reduced confidence people are having in the
economic outlook, (the jump in claims) just adds to those
fears," said David Sloan, economist at 4Cast Ltd in New York.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
34/32 in price to yield at 3.24 percent.
The U.S. dollar rose against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.17 percent at 86.543.
Against the yen, the dollar <JPY=> was down 1.79 percent at
89.99.
Oil extended early losses on the U.S. jobless data and
slide in global equity markets.
U.S. light sweet crude oil <CLc1> fell $1.17 to $68.70 a
barrel.
Spot gold prices <XAU=> rose $1.05 to $1191.80 an ounce.
Worries over the euro zone hammered Asian stocks, driving
MSCI's index of Asia-Pacific shares outside of Japan
<.MIAPJ0000PUS> down 2.2 percent to an eight-month low.
Japan's Nikkei average <> closed at a new three-month
low, unable to overcome encouraging data that showed Japan's
economy grew 1.2 percent in the first quarter, outpacing its
euro zone and U.S. peers. []
(Reporting by Nick Olivari and Ellen Freilich in New York and
Emma Farge, Ian Chua and William James in London; Writing by
Herbert Lash)
