(Adds U.S. market close)
By Herbert Lash
NEW YORK, Feb 4 (Reuters) - Wall Street stocks slipped on
Monday as credit worries again plagued financial shares after
European and Asian markets managed a recovery on a recent spate
of mergers that included Microsoft's bid for Yahoo.
Crude futures rose to more than $90 a barrel, rebounding on
technical support after sliding 3 percent on Friday. Bonds
dropped on profit taking following a recent rally in
anticipation of last week's U.S. Federal Reserve rate cut.
The dollar slipped against the euro and edged up against
the yen as investors waited to see how central banks respond
this week to the potential global economic slowdown that
sparked a U.S. Federal Reserve rate cut last week.
American Express was the biggest drag on the Dow after UBS
cut the company's shares to "sell" because of recession
concerns which could affect consumers paying on their debt. The
brokerage also cut its ratings on Capital One Financial Corp
<COF.N> and Discover Financial Services <DFS.N>.
"Credit issues are going to be an ongoing problem for the
market," said Warren Simpson, managing director at Stephens
Capital Management in Little Rock, Arkansas.
Adding to the concern about the U.S. economy was a
government report that showed factory orders rose less than
expected in December.
The Dow Jones industrial average <> was down 92.67
points, or 0.73 percent, at 12,650.52. The Standard & Poor's
500 Index <.SPX> was down 12.41 points, or 0.89 percent, at
1,383.01. The Nasdaq Composite Index <> was down 24.16
points, or 1.00 percent, at 2,389.20.
In Europe the industrial sector provided some of the
strongest upside but stocks pared gains on the U.S. factory
orders report and the slide on Wall Street.
Vestas <VWS.CO> rose 7.7 percent after the world's top wind
power plant producer raised its 2007 sales and profit outlook.
Royal Bank of Scotland rose more than 4 percent after a
report said the bank could sell assets, including its minority
stake in Bank of China.
Japanese stocks closed at a two-week high as Microsoft's
$44.6 billion bid for Yahoo boosted Softbank Corp and buoyed
market sentiment. Shares of Yahoo Japan, 41 percent owned by
Softbank and one-third by Yahoo Inc, rose 9.5 percent.
The FTSEurofirst 300 index <> rose 0.8 percent on the
day while MSCI main world equity index <.MIWD00000PUS> was up
0.7 percent, hitting highs last seen in mid-January.
Emerging stocks <.MSCIEF> and Asian stocks <.MSCIAPJ> were
both up more than 2 percent.
U.S. Treasury debt prices fell as bond traders took profits
ahead of new supply of government bonds this week while euro
zone government bonds fell as investors locked in profits from
the recent rally in safe-haven government debt.
"We have some supply ahead of us and supply has not been
received all that well (lately)," said John Spinello, Treasury
bond strategist at Jefferies & Co in New York.
Benchmark U.S. 10-year Treasury notes <US10YT=RR> were
trading 14/32 lower in price for a yield of 3.65 percent.
Oil rebounded as a dense sea fog slowed crude imports into
the Houston Ship Channel, conduit to the busiest U.S.
petrochemical port. Fifty-nine ships were waiting for the fog
to clear, according to the U.S. Coast Guard.[]
U.S. crude <CLc1> settled up $1.06 at $90.02 a barrel,
after tumbling more than 3 percent on Friday. London Brent
crude <LCOc1> gained $1.03 at $90.47 a barrel.
Disruptions to imports into the Houston channel can lead to
sharp drawdowns in commercial crude inventory levels, and
occasionally force oil refiners to slow output.
A warning about slowing economic conditions by
policy-makers at the Reserve Bank of Australia, the Bank of
England and the European Central Bank this week, investors'
willingness to take risks could suffer.
The euro climbed 0.2 percent to $1.4835 <EUR=>, largely
driven by gains in the euro against the yen and profit taking
on the dollar's burst of strength on Friday.
The dollar ticked up 0.1 percent to 106.76 yen <JPY=>.
The Australian dollar rose 0.4 percent to US$0.9080 after
earlier touching a two-month high of US$0.9100 <AUD=>.
The British pound gained 0.5 percent to $1.9753 <GBP=>.
Platinum roared to a record high and palladium hit a
six-year peak on Monday as supply concerns persisted in top
producer South Africa due to an electricity crisis, analysts
said.
Gold fell more than 2 percent to its lowest level in nearly
two weeks on profit-taking and technical selling.
Spot gold <XAU=> fell as low as $891.65, the lowest since
Jan. 24, before paring losses.
(Reporting by Herbert Lash. Editing by Richard Satran)
