* MSCI All-Country World index falls 1 pct
* Euro falls broadly on Europe's banking concerns
* Safe-haven trade pushes yen to 15-year high vs dollar
* Government bonds firmer; oil price falls
(Updates with U.S. stocks close)
By Walter Brandimarte
NEW YORK, Sept 7 (Reuters) - World stocks pulled back from
a one-month high on Tuesday, the euro tumbled and the yen hit a
15-year peak against the dollar on renewed concerns about
European banks and the global economy.
Oil prices fell as the end of the U.S. holiday driving
season added to the economic concerns. Gold prices rose as a
result of investors seeking shelter from global economic
concerns.
The yen also strengthened after comments by the Bank of
Japan governor raised talk Japan was not preparing to stem the
yen's strength.
U.S. Treasury prices rebounded after three sessions of
losses as investors sought safety. Many also had second
thoughts about the positive market impact of the U.S. payrolls
report on Friday.
Souring investor sentiment was data showing German
manufacturing orders unexpectedly fell in July at their
steepest rate in more than a year. For details, see
[].
Investors were also rattled by a Wall Street Journal report
that said "stress tests" published more than a month ago
underestimated some lenders' holdings of potentially risky
government debt.
That helped rekindle concerns about the vulnerability of
the sector after Germany's banking association said Monday the
country's 10 biggest banks may need 105 billion euros of
additional capital.
"There's concern about the health about the European
banking sector ... that fear kind of comes and goes," said Tom
Schrader, managing director, U.S. equity trading at Stifel
Nicolaus Capital Markets in Baltimore.
The MSCI All-Country World equity index <.MIWD00000PUS>
fell 1.03 percent, one day after closing at its highest level
in nearly one month.
Major U.S. stock indexes tumbled more than 1 percent, with
investors pocketing part of last week's strong gains. Wall
Street returned from a long Labor Day holiday weekend.
The Dow Jones industrial average <> closed down 107.24
points, or 1.03 percent, at 10,340.69, while the Standard &
Poor's 500 Index <.SPX> lost 12.67 points, or 1.15 percent, to
1,091.84. The Nasdaq Composite Index <> fell 24.86 points,
or 1.11 percent, to 2,208.89.
"It looks more like a consolidation than some type of
conviction selloff," said Maier Tarlow, a New York Stock
Exchange floor trader at Raven Securities. "We think that the
market has got a bullish trend now, and unless we see repeated
selloffs on better volume, we're going to keep that opinion."
The FTSEurofirst 300 index <> of top European shares
dropped 0.38 percent, with banking and mining shares losing
ground and cutting off a two-week rally.
French bank Societe Generale <SOGN.PA>, fell 3.85 percent.
Mining shares weakened after Australian Prime Minister
Julia Gillard secured a second term in office, vowing to press
ahead with a new mining tax and work towards a scheme that
would force major polluters to pay for their carbon emissions.
The stocks of Xstrata <XTA.L>, BHP Billiton <BLT.L> and Rio
Tinto <.RIO.L> ended down 1.4 to 1.8 percent
U.S. crude oil <CLc1> fell $0.51 to $74.09 per barrel.
EURO TUMBLES ON RISK AVERSION
Banking fears knocked down the euro, which weakened 1.5
percent against the dollar to $1.2679.
The yen's safe-haven status pushed it to a 15-year high
against the U.S. dollar.
The dollar was down 0.48 percent against the yen <JPY=>, at
83.78. Against major currencies, however, the greenback was up
1.03 percent, according to the U.S. Dollar index <.DXY>.
Earlier in the trading day, the Bank of Japan Governor
Masaaki Shirakawa said monetary authorities could not control
forex rates, increasing speculation that Japan was not
preparing to try to weaken the yen in the near term.
[]
Shirakawa "has essentially ruled out intervention in the
near term," CitiFXWire analysts said in a client note, adding
that the statement helped to encourage yen bulls.
However, Japanese Finance Minister Yoshihiko Noda on
Tuesday said the government would take firm action on
currencies when needed, saying recent moves were clearly
one-sided. []
Ashraf Laidi, chief market strategist at CMC Markets in
London said the Japanese currency is being bolstered by
expectations that incumbent Prime Minister Naoto Kan will stave
off a leadership challenge by rival Ichiro Ozawa.
[]
U.S. Treasuries benefited from a flight to quality trade.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose 1
point in price, with the yield at 2.598 percent. The 30-year
bond <US30YT=RR> was up 77/32, with the yield at 3.6624
percent.
Treasuries prices had been under pressure from
stronger-than-expected U.S. economic data last week, including
Friday's jobs numbers.
Spot gold <XAU=> rose 0.43 percent, to $1,254.90 an ounce.
(Additional reporting by Daniel Bases, Tricia Wright, John
Parry and Nick Olivari; Editing by Andrew Hay)
