GLOBAL MARKETS-Stocks, oil slide on recovery worries

                                
   * Equities fall on worries over fledgling economic recovery
                                
 * Oil dips below $81 a barrel as dollar firms, stocks fall
                                
 * U.S. Treasury prices sag on pending supply, rate worries
                                
 * Sterling falls broadly after poor UK data, dollar gains
 (Updates with close of U.S. markets)
                                
 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. economic recovery.
                                
 The Dow Jones industrial average closed below the 10,000
mark, as weak results from industrials overshadowed robust
earnings from bellwethers in technology.
                                
 The dollar and euro soared against sterling after data
showed Britain was still mired in recession, with the economy
shrinking 0.4 percent in the third quarter, which stunned
investors who had expected a return to growth. For more 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.
                                
 The euro <EUR=> retreated, falling below $1.50.
                                
 Oil stocks reversed early gains as U.S. crude futures
<CLc1> settled almost 1 percent lower on skepticism that
recovery was robust enough to spur demand. [ID:nSP188331]
                                
 "Any time the dollar shows signs of life, the stock market
goes down. There's a flight to safety," said Joe Saluzzi,
co-manager of trading at Themis Trading in Chatham, New
Jersey.
                                
 "The (weak) UK GDP gave strength to the dollar. And when
the dollar is up, oil falls."
                                
 World stocks fell, with the MSCI All-Country Word Index
<.MIWD00000PUS> losing 0.76 percent.
                                
 Weak industrial sector earnings also 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 6.5 percent after it posted a 30
percent drop in quarterly profit. The stock helped drag an S&P
industrials index <.GSPI> down 1.7 percent. [ID:nN22525797]
                                
 The Dow Jones industrial average <.DJI> closed down 109.13
points, or 1.08 percent, at 9,972.18. The Standard & Poor's 500
Index <.SPX> slid 13.31 points, or 1.22 percent, at 1,079.60.
The Nasdaq Composite Index <.IXIC> fell 10.82 points, or 0.50
percent, at 2,154.47.
                                
 For the week, the Dow was off 0.2 percent, the S&P 500 shed
0.7 percent and the Nasdaq slipped 0.1 percent.
                                
 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 soon-to-expire tax incentive for
first-time buyers. [ID:nN2395552]
                                
 Weekly U.S. government data showing 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]
                                
 "Oil is holding around $80 but the decline in equities
markets and a stronger dollar mean the rally in oil prices has
been stalled for now," said Gene McGillian, analyst at
Tradition Energy in Stamford, Connecticut.
                                
 U.S. crude <CLc1> for December delivery settled down 69
cents a barrel at $80.50, while Brent crude <LCOc1> settled
down 59 cents to $78.92.
                                
 The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.48 percent at 75.476.
                                
 The euro was down 0.18 percent at $1.4995, and against the
yen, the dollar <JPY=> was up 0.74 percent at 92.07.
                                
 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 19/32 in price to yield 3.49 percent.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares closed down 0.6 percent at 1,008.88. 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.
                                
 Gold dropped in choppy trade. U.S. December gold futures
<GCZ9> settled down $2.20 at $1,056.40 an ounce in New York.
                                
 But copper climbed to a 13-month high on favorable economic
data. Copper for December delivery <HGZ9> rose 3.65 cents to
settle at $3.0345 a pound, after touching $3.0620.
                                
 The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was up 1.3 percent.
                                
 The Nikkei index <.N225> in Tokyo finished up 0.2 percent.
 (Reporting by Rodrigo Campos, Wanfeng Zhou and Joshua Schneyer
in New York, and Joanne Frearson, Barbara Lewis and Emelia
Sithole-Matarise in London; Writing by Herbert Lash; Editing by
James Dalgleish)