* Euro zone talks awaited, markets expect Irish bailout
* World stocks fall for seventh straight session
* Possible Chinese tightening weighs on commodities
* For a TAKE A LOOK on Ireland, click on []
(Updates with U.S. markets' close)
By Walter Brandimarte
NEW YORK, Nov 16 (Reuters) - World stocks fell for the
seventh straight session on Tuesday as growing tensions about
Europe's debt problems and expectations of tighter credit in
China weighed on commodity prices and hurt investor sentiment.
The U.S. dollar rose to a seven-week high against major
currencies as anxiety about the outcome of Ireland's debt
crisis sent the euro below $1.35.
Major U.S. stock indexes lost more than 1.5 percent while
Japanese stocks were headed for a tepid start, with Nikkei
futures traded in Chicago <NKZ0> flat at 9,705.00 points.
Ireland's bond yields rose while euro zone finance
ministers discussed in Brussels a solution for the crisis.
A joint mission of the European Central Bank, the EU
Commission and the International Monetary Fund will head to
Ireland in the next few days to look for ways to support the
country, especially its banks, the ministers said.
Despite the apparent readiness of the European Union to
come up with a rescue plan for Ireland, Dublin resisted
agreeing to a state bailout, saying that only its banks may
need help.
"There's a global concern that if Ireland needs aid, it
could become a domino effect with other countries," said Cort
Gwon, director of trading strategies and research at FBN
Securities in New York.
"Especially at such a sensitive time in the economy to have
a setback in Europe could mean a setback for the rest of the
world, too."
The premium investors demand to hold Irish government bonds
rather than German benchmarks <IE10YT=RR> <DE10YT=RR> widened
to 581.6 basis points from around 562 basis points at Monday's
settlement.
The cost of insuring against debt default in Ireland,
Portugal and Greece also crept higher, even as EU Economic and
Monetary Affairs Commissioner Olli Rehn said Portugal's
challenges were "very different" from those of Ireland.
World stocks fell 1.77 percent, according to the MSCI
All-Country World Index <.MIWD00000PUS>. The index has lost
about 4.0 percent since Nov. 5 when it closed higher for the
last time.
In Europe, the FTSEurofirst 300 <> index of top
shares ended down 2.3 percent at 1,086.61 points.
The Dow Jones industrial average <> fell 178.47 points,
or 1.59 percent, at 11,023.50, while The Standard & Poor's 500
Index <.SPX> declined 19.41 points, or 1.62 percent, to
1,178.34. The Nasdaq Composite Index <> sank 43.98 points,
or 1.75 percent, to 2,469.84.
The euro <EUR=> slipped 0.77 percent to $1.3478 as anxiety
about Ireland eclipsed a stronger-than-expected reading of
German ZEW institute's economic sentiment index.
"What's the driving the euro is just all the sovereign risk
out of Europe," said Jack Iles, a portfolio manager at MFC
Global Investment Management in Boston. "That's driving
sentiment across the board for risk assets and that probably
will not go away in the next 48 hours."
The dollar gained 1.0 percent versus a basket of major
currencies, according to the U.S. Dollar Index <.DXY>. Against
the Japanese yen, the dollar <JPY=> rose 0.28 percent to
83.36.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Euro zone debt graphic: http://r.reuters.com/hyb65p
Ireland's bailout graphic: http://r.reuters.com/wuv48p
FX futures positioning: http://r.reuters.com/kus26k
ECB bond buy graphic: http://r.reuters.com/zeq88n
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
CHINESE TIGHTENING
Chinese shares <> sank nearly 4.0 percent to a
one-month low on reports that China will unveil food price
controls and crack down on commodity speculation to contain
inflationary pressure. []
The reports increased expectations that China will further
tighten monetary policy to help fight inflation. Commodity
prices fell as a result, as China is one of the world's top
consumers of raw materials.
U.S. crude oil prices <CLc1> lost 2.97 percent to $82.34 a
barrel, the lowest close since Oct. 29. Spot gold prices <XAU=>
fell 1.47 percent to $1,338.90, notching their biggest
three-day loss in nearly a year.
The Reuters/Jefferies CRB Index <.CRB> of commodities
futures was down 3.2 percent.
Benchmark 10-year U.S. Treasuries <US10YT=RR> recovered
from a dramatic two-day selloff and rose a full point in price,
sending their yield down to 2.8418 percent.
Investors bought Treasuries again on news that core U.S.
producer prices fell unexpectedly in October, supporting the
case for the Federal Reserve's program of bond repurchases.
(Additional reporting by Ryan Vlastelica, Ellen Freilich and
Nick Olivari; Editing by Kenneth Barry)
