* MSCI world equity index down 0.4 pct at 237.34
* European stocks, U.S. futures turn higher
* Oil down on econ worries, yen firmer
By Natsuko Waki
LONDON, June 23 (Reuters) - World stocks and oil slipped on
Tuesday as concerns about the prospect for an economic recovery
pushed key equity indexes into negative territory for the year.
However, European stocks recouped some losses and Wall
Street was set for a firmer open after U.S. stocks suffered
their worst one-day loss in two months on Monday.
The S&P 500 index <.SPX> is back into negative territory for
the year and the pan-European FTSEurofirst 300 index <>
also briefly fell below its 2008 close level.
Data highlighted the fragile state of Europe's economy:
French consumer spending fell unexpectedly last month, and a
recovery stalled in the euro zone's dominant service sector with
an unexpected fall in the region's services purchasing managers
index.
Euro zone manufacturers fared better, with that sector's PMI
rising to its highest level since September.
"What we will see as this week moves on are more sideways
moves. Sideways momentum and stagnation are showing themselves
right now," said Howard Wheeldon, strategist at BCG Partners.
MSCI world equity index <.MIWD00000PUS> was down 0.4
percent, having hit a one-month low earlier. World stocks are up
just 4 percent this year.
The FTSEurofirst 300 index was down 0.1 percent on the day,
trimming earlier losses. U.S. stock futures were up 0.4 percent
<SPc1>, pointing to a firmer open on Wall Street.
Defensive sectors, such as utilities <.SX6P> and health care
<.SXDP>, were among the major gainers in Europe, reflecting
investor preference for gradually increasing equity exposure
after being underweight for the past year or so.
Emerging stocks <.MSCIEF> lost 1.8 percent.
U.S. crude oil <CLc1> fell 0.5 percent to $67.15 a barrel.
"The stock markets and global economic outlook pushed oil
through key support levels but they now seem to be finding
support," said Christopher Bellew, a broker at Bache
Commodities.
The September Bund future <FGBLc1> was down 21 ticks.
RISK CUT BACK
The low-yielding yen, which benefits from increased risk
aversion, rose 0.5 percent to 95.54 per dollar <JPY=>, having
hit a three-week high earlier.
The dollar <.DXY> fell 0.5 percent against a basket of major
currencies ahead of the Federal Reserve's monetary policy
decision after a two-day meeting on Wednesday.
Investors expect the Fed to keep interest rates near zero
while they are split on whether the Fed will expand its existing
$300 billion plan to purchase Treasuries.
"At this early and fragile stage in what appears an
improving backdrop, the Fed would not want to be blamed for
giving false hope by being a cheerleader at this point," RBC
Capital Markets said in a note to clients.
"Seeing as they have run through about half their current
allotment of ammunition for Treasury purchases, and at the
current pace they would use it all up by around late August,
this would certainly seem like a good opportunity to address
their future intentions."
Moody's Investors Services said the United States' triple-A
ratings could come under threat if Washington was unable to
bring public debt back to a downward trajectory and/or if the
dollar were severely challenged as the main international
reserve currency.
(Additional reporting by Harpreet Bhal, editing by Mike
Peacock)
