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GLOBAL MARKETS-Stocks, euro slip as Europe concerns mount
May 11, 2012 / 7:38 PM / in 6 years

GLOBAL MARKETS-Stocks, euro slip as Europe concerns mount

* Global shares retreat as Europe outweighs U.S. sentiment

* Safe-haven government debt rises, Bunds near record lows

* Oil slides on weak Chinese industrial production data

By Herbert Lash

NEW YORK, May 11 (Reuters) - Global stocks retreated on F riday as better-than-expected U.S. consumer sentiment in early May was offset by uncertainty over Europe’s festering debt crisis, while oil prices fell after weak data from China reduced demand expectations.

Safe-haven government debt rose, with yields on the benchmark 10-year U.S. Treasury note falling for the eighth straight week. The question of whether Greece can remain in the euro zone and concerns about the health of Spanish banks spurred buying.

The euro retreated against the U.S. dollar on news that the Greek Socialist party leader had been unable to form a national unity government after holding last-ditch talks with rivals.

The euro slid 0.1 percent to $1.2925, and the U.S. dollar index rose 0.18 percent to 80.257.

The 10-year U.S. Treasury note rose 9/32 in price to yield 1.84 percent.

JPMorgan Chase & Co’s trading loss of at least $2 billion from a failed hedging strategy knocked financial stocks across the globe and helped Wall Street retreat from early gains.

JPMorgan’s shares fell 9.5 percent to $36.88. The KBW index of large U.S. financial service firms fell 1.0 percent. In Europe, the euro zone STOXX banking index fell 1 percent.

“Today there is a flight to safety; Greece is not resolved, Spain is not resolved,” said Lou Brien, market strategist with DRW Trading Group in Chicago.

“And JPMorgan adds a bit of concern simply because they were assumed to be the well-run bank, and if this sort of thing could happen there, where else could it happen?” Brien said.

The Dow Jones industrial average was down 24.56 points, or 0.19 percent, at 12,830.48. The Standard & Poor’s 500 Index was down 2.23 points, or 0.16 percent, at 1,355.76. The Nasdaq Composite Index was up 6.21 points, or 0.21 percent, at 2,939.85.

European shares erased early losses to end higher, although many investors remained wary over Spain’s banks and Greece’s political impasse.

The FTSEurofirst index of top European stocks closed up 0.3 percent at 1022.52.

The MSCI world equity index turned lower, falling 0.3 percent to 314.99.

Prices of crude oil, copper and gold all fell.

Plans to support Spain’s troubled banks failed to convince investors. The Greek stock market dropped to levels last seen 20 years ago during an earlier crisis over a mechanism to reduce exchange rate swings in Europe before the euro’s advent.

German Bund futures rose as high as 143.09, up 48 ticks on the day.

Crude oil prices fell below $112 a barrel early in the session after a weak reading of industrial growth in China sparked worries that demand may slow from the world’s No. 2 oil consumer.

Chinese industrial output expanded in April at its slowest annual pace in nearly three years. When paired with poor trade figures from Thursday, the data suggest China’s economy continues to slow after a weak first-quarter performance.

Brent crude futures for June delivery settled down 47 cents at $112.26 a barrel.

The U.S. light sweet June contract settled down 95 cents at $96.13 a barrel.

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