* Oil gains as Libyan unrest helps push prices higher
* Euro advance on unexpected rise in U.S. home sales
* U.S. bonds rose as safe-haven allure returns
(Adds fresh prices, comments)
By Herbert Lash
NEW YORK, Feb 23 (Reuters) - World stocks slid further from
recent 30-month highs on Wednesday as political violence in
Libya drove up crude oil prices while fanning concerns about
inflation and its impact on global economic growth.
Stocks slipped on Wall Street a day after their worst
session since August as fears that unrest in Libya could spread
to other oil-producing nations in the region and choke off
exports pushed safe-haven government debt higher.
Brent crude futures in London climbed above $110 a barrel
while U.S. crude rose to highs last seen in October 2008.
U.S. light sweet crude oil <CLc1> rose $2.20 to $97.62 a
barrel, and Brent <LCOc1> rose $4.23 to $110.01.
"If we lose Libyan production, then you will have to
replace around 1.6 million barrels per day of very good quality
crude, which would introduce logistical implications and have a
cost," said Credit Agricole CIB analyst Christophe Barret.
Traders said prospects of higher inflation and interest
rates took center stage in currency markets, pushing aside
concerns about political tensions in North Africa.
Copper, often a barometer of economic demand, fell to the
lowest levels in nearly a month on worries inflation could slow
down global economic recovery. The metal has slipped nearly 7
percent from record highs at $10,190 a tonne earlier in the
month []
Much of the market's focus remained on Libya where Muammar
Gaddafi's attempts to crush a revolt against his four-decade
rule have killed as many as 1,000 people, Italy's foreign
minister said. []
The MSCI world equity index <.MIWD00000PUS> was down 0.5
percent.
The Dow Jones industrial average <> was down 44.08
points, or 0.36 percent, at 12,168.71. The Standard & Poor's
500 Index <.SPX> was down 3.88 points, or 0.29 percent, at
1,311.56. The Nasdaq Composite Index <> was down 17.24
points, or 0.63 percent, at 2,739.18.
Benchmark 10-year Treasury notes <US10YT=RR> pared early
losses and moved slightly into positive territory as lower
stocks bolstered the safe-haven allure of U.S. government debt.
[]
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
5/32 in price to yield 3.44 percent.
"The turmoil is not only about inflation and oil, but it is
affecting equity markets and those safe-haven flows have been
dominating recently," said Glenn Marci, strategist at DZ Bank.
The euro rose to its highest in more than two weeks,
spurred by an uexpected rise in the sale of previously owned
U.S. homes, although home prices tumbled to the lowest in
nearly nine years.
[]
"Better than expected, but I don't think it will have a
tremendous impact (on the markets) because prices went down. On
balance, it's a piece of good news but it's not statistically
significant," said Jim Awad, managing director at Zephyr
Management in New York.
The euro <EUR=> was up 0.91 percent at $1.3777. The dollar
was down against a basket of major currencies, with the U.S.
Dollar Index <.DXY> down 0.61 percent at 77.29.
(Additional reporting by Rodrigo Campos, Chris Reese and Julie
Haviv in New York; Jessica Mortimer, Zaida Espana, William
James, Joanne Frearson, Jan Harvey and Melanie Burton in
London; Writing by Herbert Lash)
(Editing by Theodore d'Afflisio)
