* World stocks, oil plunge on persistent economic worries
* Euro falls over 1 pct on dovish central banker comments
* Treasury yields fall more on safety bid
(Updates with U.S. markets open)
By Walter Brandimarte and Jeremy Gaunt
NEW YORK/LONDON, Aug 20 (Reuters) - Investors rushed into
safe-haven Treasuries, dumping stocks and eschewing the euro
on Friday as concerns about the global economic recovery
persisted for a second consecutive day.
The euro dropped more than 1 percent against the dollar
after European Central Bank Governing Council member Axel Weber
said the ECB should extend its loose monetary stance,
suggesting fears of more economic weakness ahead in the euro
zone. For details, see [].
Oil prices also fell more than 1 percent as investors, in
the absence of any major U.S. economic data, continued to worry
about Thursday's poor jobs and manufacturing numbers.
U.S. jobless claims on Thursday hit a nine-month high and a
volatile U.S. regional manufacturing index showed the first
contraction in a year.
These numbers have revived fears of a double-dip recession
in the world's largest economy and boosted demand for bonds.
"The market is falling on concerns about GDP growth going
forward," said Dean Tenerelli, fund manager at T Rowe Price.
"It's about the effect of a U.S. slowdown and uncertainty and
how earnings will look in 2011, when austerity kicks in."
The MSCI All-Country World equity index <.MIWD00000PUS>
slid 1.2 percent to a near one-month low while the FTSEurofirst
300 index <> declined 0.5 percent in its third straight
session of losses.
The three major U.S. stock indexes opened lower.
The Dow Jones industrial average <> was down 79.31
points, or 0.77 percent, at 10,191.90, while the Standard &
Poor's 500 Index <.SPX> lost 7.04 points, or 0.65 percent, to
1,068.59. The Nasdaq Composite Index <> dropped 10.48
points, or 0.48 percent, to 2,168.47.
Oil prices fell on concerns that a global economic slowdown
would reduce demand for the commodity. U.S. crude oil <CLc1>
was down 80 cents, or 1.07 percent, to $73.63 per barrel.
FALLING EURO
The euro fell against the dollar after Bundesbank chief
Axel Weber said it would be "wise" to extend unlimited
liquidity to banks past the end of 2010 and resume discussions
to exit loose monetary conditions next year.
The euro was 1 percent lower on the day at $1.2686
according to Reuters data, its lowest since mid-July.
"The comments will lead the market to believe that
policymakers are expecting further economic weakness," said
Raghav Subbarao, currency analyst at Barclays Capital.
"Although a move towards active easing requires more bad
data, slowing growth will postpone any policy tightening."
The greenback also gained against the yen, reversing
earlier losses. It was up 0.43 percent against the Japanese
currency, at 85.71 yen <JPY=>.
Bonds were benefiting from the mounting risk aversion, with
U.S. two-year yields <US2YT=RR> collapsing to a record low of
0.47 percent and 30-year yields falling to a fresh 16-month low
of 3.61 percent.
(Additional reporting by Emily Flitter, Edward Krudy, Nick
Olivari)
(Editing by Theodore d'Afflisio)
