Reuters: US Dollar Report: GLOBAL MARKETS-Stocks, euro fall on Spain bank worries

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GLOBAL MARKETS-Stocks, euro fall on Spain bank worries Jun 8th 2012, 14:08 Fri Jun 8, 2012 10:08am EDT * MSCI world share index down 1.1 pct, European shares weak * Uncertain central bank policy outlook weighs on oil and euro * Spain's bank problems, German economic slowdown in focus By Wanfeng Zhou NEW YORK, June 8 (Reuters) - Global stocks, euro and oil prices tumbled on Friday after hopes for more stimulus from central banks faded and with Spain expected to become the fourth and biggest country to seek assistance since the euro zone's debt crisis began. Four senior EU officials said finance ministers of the 17-nation single currency area would hold a conference call on Saturday to discuss a Spanish request for an aid package for its ailing banks, although no figure had yet been set. Stocks had rallied this week on expectations of global coordinated efforts to bolster slackening economic growth, but investors were disappointed after neither the European Central Bank nor the U.S. Federal Reserve signalled near-term action. "There has been little to soothe uncertainty and central bank action this week failed to remove tail risk," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto. "News flow remains relatively negative." Rating agency Fitch slashed Spain's credit rating on Thursday, leaving it just two notches short of junk status. It signalled further downgrades could come as the country tries to restructure its troubled banking system. MSCI's world equity index was down 1.1 percent at 297.81. Top European shares were down 0.8 percent. U.S. stocks fell in early trading. The Dow Jones industrial average was up 46.17 points, or 0.37 percent, at 12,460.96. The Standard & Poor's 500 Index was down 0.14 points, or 0.01 percent, at 1,314.99. The Nasdaq Composite Index was down 13.70 points, or 0.48 percent, at 2,831.02. The euro fell 1 percent to $1.2448, retreating from a two-week high of $1.2625 hit on Thursday. More losses would leave the euro vulnerable to a test of the 23-month low of $1.2286 hit on June 1, using Reuters data, after failing to break above chart resistance at $1.2623, the January low. Adding to the bearish sentiment were data showing Italian industrial production fell far more than expected in April and German imports tumbled at their fastest rate in two years. Brent crude for July dropped $1.68 to $98.25 a barrel, after hitting a low of $97.19. U.S. crude prices fell $1,88 to $82.92 a barrel, having touched a low of $82.00. Both contracts are down for a second day. The benchmark 10-year U.S. Treasury note was up 4/32, with the yield at 1.6473 percent. Link this Share this Digg this Email Reprints

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