* FTSEurofirst 300 index of top European shares down 0.5 pct
* More details on $700-billion U.S. bailout plan awaited
* Wall Street set for a weak start; European stocks fall
By Natsuko Waki
LONDON, Sept 22 (Reuters) - Wall Street is set to follow
European stocks lower and the dollar fell on Monday as jittery
investors awaited detail of Washington's $700 billion bailout to
tackle the worst financial crisis since the Great Depression.
Global stocks posted the biggest one-day gain in 20 years on
Friday after the U.S. Treasury proposed the largest-ever bank
rescue plan and world authorities banned short selling and
exercised other measures to restore calm in the markets.
However, many aspects of the U.S. plan have yet to be made
public and concerns remained over the slowing U.S. economy and
its impact on the rest of the world after a frantic week which
saw the collapse of Lehman Brothers and the firesale of Merrill
Lynch <MER.N> and UK bank HBOS <HBOS.L>.
"The plan dramatically reduces the systemic risks that have
gripped the markets for a while," said Jacques Henry, analyst at
Louis Capital Markets in Paris.
"The sharp stock rally we saw on Friday, by its magnitude,
signals a big change in direction ... But we might not see a
quick recovery because of the macroeconomic backdrop. The
slowdown is real."
The FTSEurofirst 300 index <> fell 0.5 percent while
U.S. stock futures <SPc1> were down 0.6 percent, pointing to a
weaker open on wall Street.
Asia's 2.8-percent gain <.MIAPJ0000PUS> helped push MSCI
main world equity index <.MIWD00000PUS> higher 0.7 percent,
after rallying more than 6 percent on Friday -- its biggest
percentage gain since at least 1988.
Shares of Goldman Sachs <GS.N> and Morgan Stanley <MS.N>
fell in Europe after they became bank holdings companies
regulated by the Federal Reserve, giving up their cherished
investment banking status in return for cover under the central
bank's wing.
"Even as the package is being debated, we could see more
sizable losses or another significant institution come under
pressure," said Richard McGuire, interest rate strategist at RBC
Capital Markets.
West Virginia-based Ameribank became the 12th bank to
collapse this year as the struggling economy and falling home
prices take their toll on financial institutions.
END OF BEAR MARKET?
Friday's rally pushed the MSCI world equity index off last
week's 2-1/2 year lows, bringing year-to-date losses to just
under 20 percent.
"This cyclical bear market in risky assets is probably over,
but whether a new bull market can be sustained is another
matter. And despite the huge potential rise in U.S. government
debt, the secular bull market in bonds probably still has a way
to run," Credit Suisse said in a note to clients.
The dollar lost 0.5 percent against the euro to $1.4567 per
euro <EUR=> and versus the low-yielding yen to 106.40 <JPY=>.
In the interbank market, tensions remained despite concerted
action by the world's central banks to inject liquidity to the
tune of hundreds of billions of dollars and Washington's $50
billion money market guarantee programme.
The premium on London interbank lending rates for
three-month dollars <LIBOR> over the yield on risk-free U.S.
Treasury paper <US3MT=RR> stood around 221 basis points.
The December Bund future <FGBLc1> fell 32 ticks as
safe-haven flows dwindled.
Emerging sovereign spreads <11EMJ> tightened 4 basis points
to trade 351 bps over U.S. Treasuries, while emerging stocks
<.MSCIEF> rose 1.1 percent.
U.S. light crude <CLc1> rose 2.2 percent at $106.85 a barrel
after rallying 7 percent on Friday. Gold <XAU=> rose to $880.15
an ounce.
(Additional reporting by Blaise Robinson, Naomi Tajitsu)
