Reuters: US Dollar Report: GLOBAL MARKETS-Stocks, euro sag on Greece exit worries

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

GLOBAL MARKETS-Stocks, euro sag on Greece exit worries May 23rd 2012, 15:51 Wed May 23, 2012 11:51am EDT * MSCI global stock index set for biggest drop in 6 months * Doubts over debt-crisis plan send euro to 21-month low * Germany sells interest-free debt due to safety bids * US dollar index highest since 2010 NEW YORK, May 23 (Reuters) - World stocks stumbled and the euro fell to a 21-month low on Wednesday on worries about Greece's possible exit from the euro zone, which would deepen the region's debt crisis and hurt an already fragile global economic recovery. Each euro zone country will have to prepare a contingency plan for the eventuality of Greece leaving the bloc's currency, three euro zone sources told Reuters, citing an agreement reached by officials. A scramble for low-risk investments enabled Germany to pay no interest on 5-billion euro worth of new, two-year debt amid the absence of new measures to tackle the region's debt crisis from a European leaders' summit in Brussels. "The markets are on edge and sensitive to every possible out-of-control scenario coming out of Europe," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York. Europe's leaders are expected to discuss boosting growth at a meeting later on Wednesday, as well as the idea of a joint euro-zone bond. French President Francois Hollande supports the bond plan, but German Chancellor Angela Merkel opposes it. "Most are expecting no concrete solution out of the meeting, just a few ideas discussed on how to boost growth with no real commitment to carry them out, while Angela Merkel is almost certain to reject any proposal by Francois Hollande in relation to euro bonds," said Craig Erlam, market analyst at Alpari. Perception of a stalemate between the head of the euro zone's most powerful member and leaders of other bloc countries unleashed selling of their common currency and shares worldwide. The MSCI world equity index tumbled 2.2 percent to 296.10, its lowest level in about five months. It is on track for its biggest single-day decline in six months. The Dow Jones industrial average was down 146.33 points, or 1.17 percent, at 12,356.48. The Standard & Poor's 500 Index was down 14.73 points, or 1.12 percent, at 1,301.90. The Nasdaq Composite Index was down 30.34 points, or 1.07 percent, at 2,808.74. The tech sector was a drag on U.S. shares, led by personal computer maker Dell Inc. which reported disappointing second-quarter earnings late on Tuesday. Dell dropped 17 percent to $12.51. Social networking company Facebook Inc remains a market focus since its stock started trading last Friday. Regulatory inquiries into its initial public offering have hammered its market value. Facebook rose 3 percent to $32.02, still well below its $38 IPO price. The FTSE Eurofirst index of top European shares closed 2.1 percent lower at 973.12 after touching a fresh year low at 970.98. In Tokyo, the Nikkei index closed down 2 percent to 8,556.60. The euro fell 0.9 percent to 1.2572 after touching $1.2563, its lowest level since August 2010. The dollar index rose 0.7 percent to 82.090 after touching 82.148, its highest since September 2010. "The euro's downtrend is entrenched and we think there are too many risks of potentially nasty outcomes in the euro zone, especially with regard to what will happen to Greece," said Ned Rumpeltin, currency strategist at Standard Chartered in London. Euro zone finance officials prepared contingency plans for a possible Greek euro exit on Monday afternoon, according to euro zone sources, during an hour-long teleconference of the Eurogroup Working Group. A document seen by Reuters detailed the potential costs to individual member states of a Greek exit and said that if it came about, an "amiable divorce" should be sought. The strong German Schatz auction lifted June Bund futures to a fresh contract high at 144.28, up 1 point on the day. Benchmark U.S. Treasury yields slipped to 1.72 percent, within striking distance of the lowest level at least 60 years. The United States, like Germany, could enjoy a further drop in borrowing costs when it sells $35 billion of new five-year notes at 1 p.m. (1700 GMT). These five-year issue is expected to sell at historic low yield at about 0.75 percent. Signs of a potential deal between Iran and the U.N.'s International Atomic Energy Agency to unblock investigations of suspected work on nuclear weapons in the oil-producing country sent Brent crude below $107 a barrel. Brent last traded down $1.87 at $106.54, while U.S. oil futures fell $1.22 cents to $90.63 a barrel. Spot gold prices fell for a third straight session, down 1.5 percent to $1,542.89 an ounce. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions