Reuters: US Dollar Report: GLOBAL MARKETS-Shares, euro slide on Spanish region's aid request

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GLOBAL MARKETS-Shares, euro slide on Spanish region's aid request Jul 20th 2012, 14:07 Fri Jul 20, 2012 10:07am EDT * U.S. stocks fall, European shares slip from four-month highs * Euro hits record lows against several currencies * Spanish 10-year bond yields clamber above 7 percent By Herbert Lash NEW YORK, July 20 (Reuters) - U.S. and European stocks slid on Friday and the euro hit record lows against several currencies after Spain's heavily indebted Valencia region called for aid, increasing investor doubts that the Spanish government can avoid a full-blown bailout. The risk premium on Spanish government debt hit a euro-era high as its borrowing costs climbed back above the 7 percent threshold considered unsustainable, with little relief seen any time soon. The euro plunged to record lows against the Australian, Canadian and New Zealand dollar, while hitting multi-month lows against the yen, and the Norwegian and Swedish crowns. The euro fell as low as $1.2175, just above a two-year low of $1.2162 hit last week. It was last at $1.2172, down almost 0.9 percent. "The market got a little bit of a curveball thrown at it with the Valencia news," said Matthew Lifson, senior currency trader and market analyst at Cambridge Mercantile Group in Princeton, New Jersey. "We were drifting and everything was looking okay and this news comes out and it just gives people more reason to sell the euro." U.S. equity markets opened lower and European stocks extended losses to set fresh session lows after the European Central Bank said it would stop accepting Greek bonds as collateral, adding to concerns about the euro zone debt crisis. The Dow Jones industrial average was down 90.67 points, or 0.70 percent, at 12,852.69. The Standard & Poor's 500 Index was down 9.65 points, or 0.70 percent, at 1,366.86. The Nasdaq Composite Index was down 19.71 points, or 0.66 percent, at 2,946.19. The FTSEurofirst 300 traded 1.2 percent down at 1,051.65 points. German bond prices jumped and U.S. Treasuries rose as investors clamored for safe-haven assets. German 10-year bond yields fell 5 basis points to 1.171 percent, and the benchmark 10-year U.S. Treasury note was up 10/32 in price to yield 1.4753 percent. The U.S. dollar index rose almost 0.7 percent to 83.45. Oil fell toward $106 per barrel on Friday as a firmer dollar spurred a dip from an eight-week high hit the previous session due to supply worries linked to tension in the Middle East and hopes of an economic stimulus in the United States. Oil prices also eased after hitting an eight-week peak on supply concerns linked to rising Middle East tension, but the rally in soft commodities, which has seen corn and soybean prices soar to record highs, showed no signs of abating. Brent crude was down $1.58 at $106.22 a barrel at 1335 GMT, but still headed for its longest winning streak since the end of February, having gained about 18 percent over the four week period. U.S. August crude was down $1.39 at $91.27 a barrel around the same time. It is on track for an almost 6 percent gain this week, its third weekly gain in four. Link this Share this Digg this Email Reprints

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