GLOBAL MARKETS-Oil, global stocks fall on recovery concerns

                                
   * Worries over fledgling economic recovery sap equities
                                
 * U.S. Treasury prices sag on pending supply, rate worries
                                
 * Sterling slips versus U.S. dollar, euro on weak UK data
                                
 * Oil dips below $81 a barrel as dollar firms, stocks fall
 (Updates with U.S. markets, changes byline, dateline from
LONDON)
                                
 By Herbert Lash
                                
 NEW YORK, Oct 23 (Reuters) - The U.S. dollar rose and
global stocks fell on Friday as energy shares followed crude
prices lower and investors worried about the pace of a
fledgling U.S. recovery.
                                
 The dollar and euro soared against sterling after data
showed the UK economy was still mired in recession, stunning
investors who had expected a return to growth. For details, see
[ID:nN23107079]
                                
 Sterling plunged nearly three cents against the dollar and
notched its biggest one-day decline against the euro in six
months as traders bet the Bank of England was more likely to
expand its quantitative easing program to secure a recovery.
                                
 Oil stocks reversed early gains as U.S. crude futures
<CLc1> fell more than 1 percent on skepticism that recovery was
robust enough to spur demand. Oil was below $81 a barrel.
                                
 "We are back to a situation where the markets have rallied
quite strongly. We have had a interesting week of both good and
bad news. I just think this is profit taking," said Howard
Wheeldon, strategist at BGC Partners.
                                
 Weak industrial sector earnings made investors question the
recovery's strength, which overshadowed robust results from
 technology heavyweights Microsoft Corp <MSFT.O> and Amazon.com
Inc <AMZN.O>.
                                
 Shares of Burlington Northern Santa Fe Corp <BNI.N>, the
No. 2 U.S. railroad, slid 6.3 percent after it posted a 30
percent drop in quarterly profit. The stock helped drag an S&P
industrials index <.GSPI> down 1.6 percent. [ID:nN22525797]
                                
 Shortly after 1 p.m. (1700 GMT), the Dow Jones industrial
average <.DJI> was down 82.60 points, or 0.82 percent, at
9,998.71. The Standard & Poor's 500 Index <.SPX> was down 10.69
points, or 0.98 percent, at 1,082.22. The Nasdaq Composite
Index <.IXIC> was down 4.68 points, or 0.22 percent, at
2,160.61.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares closed down 0.6 percent at 1,008.88 points. The index is
up 21 percent this year and has gained almost 56 percent from a
record low hit in March after sliding 45 percent in 2008.
                                
 "If you go through the corporate earnings results, the top
line is still suggesting it's a difficult environment for
improving sales," said analyst Jane Foley of FOREX.com.
                                
 Stocks fell despite a surge in sales of previously owned
U.S. homes to a two-year high in September. Analysts said the
rise was partially driven by a tax incentive for first-time
buyers. [ID:nN2395552]
                                
 Weekly U.S. government data that showed a decrease in
stores of gasoline helped push crude prices lower, even as
overall fuel inventories are still much higher than a year ago.
[EIA/S]
                                
 U.S. Treasury debt prices eased as investors positioned to
cut prices ahead of next week's record sales of government
notes. [ID:nN23432472]
                                
 The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 15/32 in price to yield 3.48 percent.
                                
 Euro zone government bond prices also sagged, driving
benchmark 10-year Bund yields to a one-month high, as a batch
of upbeat regional data strengthened expectations of a durable
recovery in the single currency bloc.
                                
 Euro zone services business grew at its fastest pace in 20
months in October, quicker than expected, while manufacturing
activity expanded for the first time in over a year, suggesting
the recovery is gathering pace. [ID:nLAG003856]
                                
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.32 percent at 75.334.
                                
 The euro <EUR=> was up 0.09 percent at $1.5035, and against
the yen, the dollar <JPY=> was up 0.66 percent at 91.99.
                                
 Spot gold prices <XAU=> fell $3.15 to $1056.80 an ounce.
                                
 The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was up 1.3 percent, while the Thomson Reuters
index of regional shares <STXEc1> was 1.5 percent higher.
                                
 The Nikkei index <.N225> in Tokyo finished up 0.2 percent.
 (Reporting by Leah Schnurr, Steven C. Johnson and Joshua
Schneyer in New York; Joanne Frearson, Barbara Lewis and Emelia
Sithole-Matarise in London; writing by Herbert Lash; Editing by
Kenneth Barry)