*World stocks stumble on US earnings, economic reports
*Dollar benefits from euro zone fiscal worries
*Stocks weaken after Fed chief Bernanke confirmed
(Updates with U.S. markets close)
By Al Yoon
NEW YORK, Jan 28 (Reuters) - Most global shares slumped on
Thursday after reports cast doubts on the U.S. economic
recovery and the health of the UK banking system, while fiscal
worries elsewhere in Europe dented the euro versus the dollar.
Earnings and outlooks from big technology companies such as
Qualcomm <QCOM.O> and Motorola <MOT.N> fell short of
expectations and also pushed U.S. stocks lower.
Shares in the United States and Europe fell as weekly
figures on initial claims for unemployment benefits suggested a
sluggish jobs recovery. Another report showing a disappointing
rise in big-ticket durable goods orders also dimmed the
recovery outlook.
"We used to think we would start creating jobs in the first
half of the year, but data points like this suggest that's less
likely," said Michael Sheldon, chief market strategist at RDM
Financial in Westport, Connecticut. "The longer it takes to
create jobs, the more uncertain the recovery becomes."
Stocks added to losses at the close of trading in New York
after Federal Reserve Chairman Ben Bernanke was confirmed by
the U.S. Senate, causing the benchmark Standard & Poor's 500
Index to close below the key 1,085 level. []
The Dow Jones industrial average <> fell 115.70 points,
or 1.13 percent, to end at 10,120.46. The Standard & Poor's 500
Index <.SPX> lost 12.97 points, or 1.18 percent, to 1,084.53.
The Nasdaq Composite Index <> declined 42.41 points, or
1.91 percent, to close at 2,179.00.
World stocks as measured by MSCI fell nearly 1 percent. The
index is at its lowest since Nov. 6 and down more than 7
percent from highs set earlier this month.
European stocks also struggled, and the euro fell, as
concerns about banks and the fiscal health of Greece, Portugal
and other euro zone countries weighed on investor confidence.
European shares dropped 1.2 percent.
German unemployment beat forecasts, while European Central
Bank Executive Board member Gertrude Tumpel-Gugerell said it
was time fiscal and monetary policy returned to normal.
In currencies, the dollar rose to its highest level in more
than six months against the euro as Germany and France denied a
newspaper article suggesting an EU bailout for Greece was being
planned, while Athens said it has struck no deal for China to
buy its bonds and will search mainly in Europe for funds.
The premium investors demand to hold Greek government bonds
rather than benchmark German Bunds set a new euro lifetime high
on Thursday. In U.S. debt, benchmark 10-year U.S. note yields
were little changed at 3.64 percent.
Meantime, budget proposals from the Portuguese government
on Wednesday failed to reassure ratings firms. The premium to
hold Portuguese debt compared with German bonds also rose.
"Clearly that concern is not going away and if anything,
it's becoming a greater concern for the market," said Matthew
Strauss, senior currency strategist at RBC Capital Markets in
Toronto. "It seems that the market is willing to push
euro/dollar even lower."
The euro <EUR=> dropped 0.31 percent to $1.3973, the lowest
level since mid-July. The dollar rose against a basket of major
trading-partner currencies <.DXY>, up 0.31 percent at 78.921,
but fell 0.11 percent against the Japanese yen to 89.90 yen
<JPY=>.
Losses sustained in Europe and the United States followed
an upbeat day in Asia where Japan's Nikkei average rose 1.6
percent, snapping a four-day losing streak following positive
reports from Honda Motor and Sony Corp.
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> rose 27 cents, or 0.37 percent, to $73.94 per
barrel, and spot gold prices <XAU=> rose 90 cents, or 0.08
percent, to $1086.80.
(Additional reporting by Tamawa Desai, Harpreet Bhal, Naomi
Tajitsu, Elaine Lies, Ryan Vlastelica, Chuck Mikolajczak and
Wanfeng Zhou; Editing by Kenneth Barry)
