* Global stocks, euro fall; US Treasuries rally
* US new home sales fall to record low
* Concerns over Europe's banks spur sales of risky assets
(Updates with European markets' close)
By Walter Brandimarte
NEW YORK, June 23 (Reuters) - Global stocks and the euro
fell on Wednesday after record low U.S. home sales added to
fears about the global recovery and investors cautiously
awaited a key policy statement from the U.S. Federal Reserve.
The disappointing U.S. housing data revived safe-haven
demand for U.S. Treasuries, pushing commodity prices lower and
increasing investor aversion to risk in general.
The cost of protecting Greek government bonds from default
jumped to a near record high as a result, underscoring
lingering concerns about Europe's debt problems, while oil
prices fell more than $2 per barrel.
Sales of new U.S. single-family homes dropped 32.7 percent
to a seasonally adjusted annual rate of 300,000 units, the
lowest level since record keeping started in 1963. The drop
unwound two months of gains, which had been inspired by a
government tax credit for home buyers.
"The numbers are really bad and basically risk is off now,
with the euro falling as well as commodity currencies, such as
the Canadian dollar," said Amelia Bourdeau, currency
strategist with UBS in Stamford, Connecticut.
Investors worry the weak data could force U.S.
policy-makers to offer a less upbeat outlook on the economy at
the end of the Federal Open Market Committee's two-day meeting
later on Wednesday. []
The Dow Jones industrial average <> inched down 1,73
points, or 0.02 percent, to 10,291.79, while the Standard &
Poor's 500 Index <.SPX> dropped 3.56 points, or 0.33 percent,
to 1,091.75. The Nasdaq Composite Index <> was down 6.34
points, or 0.28 percent, at 2,255.46.
Trading was expected to be choppy ahead of a statement
from the Federal Reserve's rate-setting committee at about
2:15 p.m. EDT (1815 GMT). Since 2008, the S&P 500 has risen 79
percent of the time for an average gain of 1.2 percent on days
of Fed rate decisions, according to Birinyi Associates Inc.
In Europe, the FTSEurofirst 300 index <> of top
shares closed down 1.02 percent, with technical charts
suggesting there could be more declines over the coming days.
"We have fallen back after U.S. new home sales data and,
in this context, we expect the market to continue to go lower
over the next week," said Christian Stocker, strategist at
UniCredit Global Research in Munich.
Financial stocks ranked among the top decliners in Europe,
with Barclays <BARC.L>, BNP Paribas <BNPP.PA>, Credit Agricole
<CAGR.PA> and Societe Generale <SOGN.PA> down 1.4 percent to
3.2 percent.
Concerns about Europe's banking system were on the rise
after Credit Agricole pushed back profit targets for its
struggling Greek unit Emporiki <CBGr.AT> and said it would
take a 400-million-euro ($536.7 million) write-down as Greece
fights to manage its debt load. []
MSCI's all-country stock index <.MIWD00000PUS> dropped 1
percent, while the firm's index of emerging market stocks
<.MSCIEF> fell 1.1 percent.
During Asian trading hours, Japan's Nikkei average <>
lost 1.9 percent to end at 9,923.70, a one-week closing low,
as it approached a major support level of 9,800, and investors
sold some shares on renewed concerns about the euro zone.
EURO, OIL AND GOLD FALL
The euro <EUR=>, which was already struggling on concerns
about the euro zone's banking system, slipped 0.26 percent at
$1.2234 after the U.S. housing data.
News that borrowing by Portuguese banks from the European
Central Bank doubled in May to a record 35.8 billion euros
($48.03 billion) underscored those concerns.
Adding to the poor sentiment toward the euro, billionaire
investor George Soros said the currency is a "patently flawed
construct" and that Germany's budget savings policy is making
it harder for other countries in the region to regain
competitiveness. []
The benchmark 10-year U.S. Treasury note <US10YT=RR>
jumped 13/32 in price, to yield 3.1172 percent, after the
housing data.
U.S. crude oil futures prices <CLc1> fell $1.63, or 2.1
percent, to $76.22 per barrel, after earlier dropping more
than $2 to a session low at $75.17.
Gold prices <XAU=> dropped 0.68 percent to $1,230.50 in
response to the dollar's strength and stocks' decline after
the weak U.S. home sales data.
(Reporting by Walter Brandimarte; Additional reporting by
Rodrigo Campos and Ellen Freilich in New York, and Joanne
Frearson in London; Editing by Jan Paschal)
