* Wall Street slips after disappointing corporate results
* Oil falls below $67 after longest rally in 2009
* Dollar slips vs euro as positive Europe data weighs
* Bonds little changed, stocks offset supply worry
(Updates with U.S. markets activity, changes byline, dateline,
previous LONDON)
By Herbert Lash
NEW YORK, July 24 (Reuters) - World stocks eased from
nine-month highs on Friday, after disappointing results from
U.S. corporate bellwethers sparked fear among investors that a
rally was losing steam, but crude oil prices chugged higher.
In an odd twist, London's top stock gauge rose for a 10th
straight day despite news that British economic output dropped
twice as hard as forecast in the second quarter of the year.
For story see [].
Yet European shares fell, ending a nine-day rally, even as
news from mainland Europe's top economies, Germany and France,
and the 16-country euro zone as a whole, was more encouraging.
[]
Optimism that the global economy was poised to turn around
led crude oil to pull back from below $67 a barrel to trade
higher on hopes growth would lift battered fuel demand.
[]
Sentiment in favor of an improving economy and recovery in
demand could be seen in other commodities. Copper hit a
nine-month high and aluminum rose to eight-month highs.
[]
"The market is continuing to feel the strength of economic
optimism from the greater financial markets," said Gene
McGillian, an analyst for Tradition Energy in Stamford,
Connecticut.
"I think the strength of the rally is derived mainly from
the idea that as we enter the end of this year and early next
year, further economic gains will kick demand back in."
The dollar slipped against a broadly higher euro, as data
and news suggesting a stabilizing euro zone economy supported
expectations for a global recovery this year. []
Solid corporate earnings have boosted sentiment this week
but weak results from Microsoft <MSFT.O> and American Express
<AXP.N> after the bell on Thursday gave investors pause after
global stocks jumped more than 6 percent this week.
The MSCI world equity index <.MIWD00000PUS> is up about 14
percent this year, and despite declines in a leading index of
European stocks and slide on Wall Street, was slightly above
break-even on Friday.
U.S. stocks extended losses after a gauge of consumer
sentiment fell in July, roughly in line with expectations, and
dour corporate results.
Microsoft Corp shares tumbled 9 percent after a 17 percent
drop, which was more than expected, in quarterly revenue.
American Express and fellow credit card issuer Capital One
Financial Corp <COF.N> said rising customer delinquencies
reduced second-quarter earnings. []
"The market wants to see progressively better reports and
the last 24 hours have not generated them," said Alan Gayle,
director of asset allocation at RidgeWorth Investments in
Richmond, Virginia.
"Microsoft earnings are a reminder that the economy is
still soft".
Shortly after 1 p.m. (1700 GMT), the Dow Jones industrial
average <> was down 27.21 points, or 0.30 percent, at
9,042.08. The Standard & Poor's 500 Index <.SPX> was down 3.87
points, or 0.40 percent, at 972.42. The Nasdaq Composite Index
<> was down 20.89 points, or 1.06 percent, at 1,952.71.
The FTSEurofirst 300 <> index of top European shares
ended 0.1 percent lower at 907.39.
But the FTSE 100 <> index in London ended up 0.4
percent at 4,576.61, its highest close since Jan. 7. The index
has risen almost 11 percent in the past two weeks.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.06 percent at 78.753.
U.S. light sweet crude oil <CLc1> rose 22 cents to $67.38 a
barrel.
Spot gold prices <XAU=> rose $5.70 to $952.85 an ounce.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 1/32 in price to yield 3.67 percent. The 2-year U.S.
Treasury note <US2YT=RR> was about break-even, yielding 1.02
percent.
Asian stocks hit a 10-month peak, with the MSCI benchmark
for Asia outside Japan <.MIAPJ0000PUS> up 0.6 percent. Japan's
Nikkei average <> rose 1.6 percent and closed higher for
an eighth straight day of gains.
(Reporting by Rodrigo Campos, Gertrude Chavez-Dreyfuss and
Burton Frierson in New York and Joanne Frearson, George
Matlock, Harpreet Bhal, Emma Farge, Rebekah Curtis and Michael
Taylor in London; Writing by Herbert Lash; Editing by James
Dalgleish)
