* Wall Street drops on Boeing delay, poor housing data
* US dollar slides on speculation Fed to stay mum on rates
* Weaker U.S. housing data helps spur safe-haven bonds
* Oil gains on weak dollar, supply disruptions in Nigeria
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, June 23 (Reuters) - Global stocks were weaker on
Tuesday as U.S. housing data reinforced the view of a sluggish
recovery, while the U.S. dollar fell on speculation the Federal
Reserve may lessen expectations of an interest rate rise.
Oil prices rebounded as the dollar weakened and disruptions
from Nigeria, a member of the Organization of the Petroleum
Exporting Countries, stoked supply concerns.
The dollar's losses supported commodities denominated in
the greenback, pushing up the benchmark Reuters-Jefferies CRB
Index of 19 commodity futures <.CRB> 0.72 percent.
U.S. Treasury debt prices rose, shrugging off a record $104
billion in U.S. debt issuance this week as investors await what
Fed policy-makers say after a two-day meeting ends Wednesday.
Euro zone government bond futures were little changed as
investors also awaited the results of a European Central Bank
tender of one-year funds.
The euro jumped more than 1 percent to trade well above
$1.40.
With no move on rates expected, investors will focus on the
Fed's statement for clues about the economic outlook and its
debt-buying program.
"There is (some) concern about the Fed," said David Watt,
senior currency strategist at RBC Capital Markets in Toronto.
The U.S. central bank also is expected to push back against
speculation that it will raise rates before the end of the
year.
"People are starting to look at whether the Fed is going to
indicate that they'll leave rates on hold for an extended
period of time," Watt said.
Another delay by Boeing Co <BA.N> for the first test flight
of its Dreamliner aircraft weighed on U.S. stocks and made the
company's stock the biggest drag on the Dow.
Boeing said the inaugural flight of its long-delayed 787
Dreamliner will be postponed so it can reinforce a section of
the aircraft. Boeing slid 9 percent to $42.72.[])
A slower-than-expected rise in sales of previously owned
U.S. homes in May also pointed to a tepid economic recovery.
[]
"The housing number suggests that things are bottoming, but
that's a far cry from improving," said Subodh Kumar, chief
investment strategist at Subodh Kumar & Associates in Toronto.
"The markets are focused on how fast the recovery is going
to be, and I think it won't be as fast as people are thinking."
The Dow Jones industrial average <> dropped 6.20
points, or 0.07 percent, to 8,332.81. The Standard & Poor's
500 Index <.SPX> gained 2.27 points, or 0.25 percent, to
895.31. The Nasdaq Composite Index <> edged up 1.09
points, or 0.06 percent, to 1,767.28.
European shares fell to their lowest close in nearly six
weeks, with financials suffering most, on renewed pessimism
about the economy.
The FTSEurofirst 300 <> index of top European shares
fell 0.4 percent to 833.67 points, the lowest close since May
13.
"Markets were discounting too sharp an economic recovery.
The pace of the recovery is going to be mediocre," said Bob
Parker, vice chairman of asset management at Credit Suisse.
Italian oil firm ENI declared force majeure on shipments of
Brass River crude oil from Nigeria. []
Persistent militant attacks over the past three years have
cut oil output in Nigeria, the world's eighth-biggest crude oil
exporter, to less than two thirds of its installed capacity of
3 million barrels per day.
"The weaker dollar is supportive and you have the supply
disruptions in Nigeria and the turmoil in Iran," said Joseph
Arsenio, managing director at Arsenio Capital Management in
Larkspur, California.
U.S. light sweet crude oil <CLc1> rose $1.04 to $68.54 a
barrel.
Spot gold prices <XAU=> rose $3.75 to $925.65 an ounce.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
9/32 in price to yield 3.65 percent. The 2-year U.S. Treasury
note <US2YT=RR> was unchanged in price to yield 1.13 percent.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> down 1.31 percent at 79.784.
The euro <EUR=> was up 1.66 percent at $1.409, and against
the yen, the dollar <JPY=> was down 1.00 percent at 94.97
Asian stocks tumbled overnight as confidence in the
recovery ebbed. Japan's Nikkei share average <> fell 2.8
percent, and the MSCI index of Asia Pacific shares outside
Japan <.MIAPJ0000PUS> dropped 2.8 percent.
(Reporting by Leah Schnurr, Wanfeng Zhou, Burton Frierson in
New York; Naomi Tajitsu, Joe Brock, Brian Gorman, Rebekah
Curtis and Pratima Desai; writing by Herbert Lash; Editing by
Kenneth Barry)
