* Spain's ratings downgrade drives stocks, euro down
* China's unexpected trade deficit fuels growth worries
* Brent crude falls below $115 a barrel
* Rising US jobless claims weigh on sentiment
(Adds U.S. crude oil falling over $3, updates prices)
By Walter Brandimarte
NEW YORK, March 10 (Reuters) - World stocks and the euro
fell on Thursday as a downgrade of Spain's credit rating added
to worries over the euro zone debt crisis, while an unexpected
Chinese trade deficit fueled global growth concerns.
Brent oil prices <LCOc1> dipped below $114 a barrel on data
showing China posted in February its largest trade deficit in
seven years. The country's exports, a gauge of global economic
activity, suffered a larger-than-expected impact from the Lunar
New Year holiday. For details, see [].
Copper prices also fell on data showing China's imports of
commodities declined. The retreat in oil prices was limited,
however, as forces loyal to Libyan leader Muammar Gaddafi
assaulted the eastern oil town of Ras Lanuf, sparking worries
about damage to the oil infrastructure. []
U.S. stocks fell around 1.5 percent as higher-than-expected
claims of unemployment benefits in the United States added to
the economic concerns.
"Overseas issues continue to play a role in U.S. markets.
The situation in Europe isn't complete, the market continues to
have concerns about sovereign credit," said Subodh Kumar, chief
investment strategist at Subodh Kumar & Associates in Toronto.
"Markets have been hoping that China would lead the
recovery, but when you put this (U.S.) data with slower growth
out of China, the idea that everything looks normal is going
away."
China exports grew in February from a year earlier but well
short of forecasts.
The Dow Jones industrial average <> lost 182.47 points,
or 1.49 percent, to 12,030.62, while the Standard & Poor's 500
Index <.SPX> fell 20.13 points, or 1.52 percent, to 1,299.89.
The Nasdaq Composite Index <> was down 49.72 points, or
1.81 percent, at 2,702.00.
In Europe, the FTSEurofirst 300 <> index of top
shares fell 1.2 percent. Global stocks measures by MSCI's
All-Country World Index <.MIWD00000PUS> slid 1.8 percent.
SPAIN DOWNGRADED
The euro <EUR=> fell 0.76 percent to $1.3802 after Moody's
downgraded Spain to Aa2 from Aa1, warning of further cuts to
the country's credit ratings. []
The move comes a few days after Moody's downgraded Greece
by three notches, fueling negative sentiment towards struggling
euro zone sovereign borrowers on the eve of a summit of the
currency bloc. []
"This (rating cut) is a reminder they need to come up with
a comprehensive, believable solution by the end of the month,"
said Colin Ellis, chief economist at BVCA.
"With the level of uncertainty at the moment, pressure on
yields will build up in the next two weeks... and you could
continue to see spreads going wider. But I'm not expecting any
spikes like those pre-Greece or pre-Ireland (bailouts)."
The U.S. dollar strengthened broadly, with the U.S. Dollar
Index <.DXY> up 0.7 percent. That contributed to a fall in oil
and other commodity prices, which became more expensive to
non-U.S. investors.
U.S. crude oil <CLc1> fell $3.40, or 3.26 percent, to
$100.98 per barrel, while Brent oil <LCOc1> traded 1.9 percent
lower at $113.73 per barrel.
Increased aversion to risk pushed investors into the
perceived safety of U.S. government bonds. Benchmark 10-year
Treasury notes <US10YT=RR> were up 11/32 in price, with the
yield at 3.4285 percent.
(Additional reporting by Chuck Mikolajczak in New York and
Marius Zaharia in London; Editing by Kenneth Barry and Chizu
Nomiyama)
