* US stocks open down on unexpected rise in jobless claims
* Dollar weakens broadly, 7-month low against Swiss franc
* Gold at highest since July 1, oil dips after jobs data
(Updates with U.S. markets open)
By Walter Brandimarte
NEW YORK, Aug 19 (Reuters) - An unexpected rise in U.S.
jobless claims weighed on global stocks and the dollar on
Thursday, sending investors to seek refuge in U.S. Treasury
debt and gold.
The U.S. dollar weakened further against the yen and hit a
seven-month low against the Swiss franc after data showed new
claims for U.S. unemployment benefits climbed to a nine-month
high last week.
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Graphic showing U.S. claims see http://link.reuters.com/zek95n
For details, see []
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The third consecutive increase in weekly jobless claims
disappointed analysts, who expected that number to fall, and
reinforced concerns about a double-dip economic recession.
"It's worse than expected. The jobs issue will continue to
hang over the stock market, as it hangs over the rest of the
nation, raising continuing issues regarding consumer and
investor confidence," said Fred Dickson, chief market
strategist at The Davidson Cos in Lake Oswego, Oregon.
The data also offset earlier optimism brought by the
Bundesbank, which said the German economy is set to grow by
around 3 percent this year, better than a previous forecast of
almost 2 percent. []
"If the economy is going down, there's no way the euro zone
can withstand the slowdown. It's too early to say we're headed
for a double dip, but things are slowing," said Win Thin,
senior currency strategist with Brown Brothers Harriman in New
York.
Investor sentiment further deteriorated after the
Philadelphia Federal Reserve Bank said factory activity in the
U.S. Mid-Atlantic region unexpectedly contracted in August to
its lowest level in more than a year. []
The MSCI All-Country World equity index <.MIWD00000PUS>
slipped 0.7 percent after hitting its highest in more than a
week earlier on the session.
European shares turned negative after the jobs data and
added to losses following the U.S. business conditions data,
sending the FTSEurofirst 300 index <> 0.9 percent lower.
The Dow Jones industrial average <> lost 117.76 points,
or 1.13 percent, to 10,297.78, while the Standard & Poor's 500
Index <.SPX> declined 13.49 points, or 1.23 percent, to
1,080.67. The Nasdaq Composite Index <> was down 24.81
points, or 1.12 percent, to 2,190.89.
DOLLAR WEAKENS
The dollar weakened against major currencies, with the U.S.
Dollar Index <.DXY> down 0.11 percent.
The greenback lost 0.47 percent against the Japanese yen
<JPY=>, to 85.02 yen. It also fell more than 1 percent versus
the Swiss franc and traded as low as 1.0295 <CHF=>, a level
last seen Jan. 19, according to Reuters data.
The euro <EUR=> rose 0.16 percent against the dollar to
$1.2875.
"Claims fits in with a gloomier assessment of the U.S.
economy, and the yen has gained a bit on it," said Brown
Brothers Harriman's Thin. "But people are still questioning
whether to sell the dollar on weak U.S. data or buy it on a
general move away from risk."
Benefiting from a renewed flight to safety, U.S. Treasuries
prices rose further.
The benchmark 10-year notes <US10YT=RR> gained 10/32 in
price, with the yield at 2.6017 percent. The 30-year bonds
<US30YT=RR> were up more than a full point in price, with the
yield at 3.6779 percent.
Gold also rallied on a safe-haven bid. Prices for the metal
hit a seven-week high of $1,235.50, up 0.57 percent on the
day.
Oil prices declined on concerns about the global economy.
U.S. crude oil prices <CLc1> fell 77 cents, or 1.02 percent, to
$74.65 per barrel.
(Additional reporting by Rodrigo Campos, Emily Flitter and
Nick Olivari)
(Editing by Theodore d'Afflisio)
