* Wall Street lower on concerns about euro zone
* Oil holds above $71 a barrel in rebound after sharp fall
* Euro softens vs dollar as euro zone debt worries persist
* U.S. bonds edge higher on renewed flight to safety bid
(Updates with U.S. markets, changes byline; dateline previous
LONDON)
By Herbert Lash
NEW YORK, Feb 8 (Reuters) - Wall Street followed European
and Asian markets lower on Monday, as the euro fell and bond
yields slid on persistent worries about the fiscal health of
southern countries in the euro zone.
Upbeat results and outlooks from U.S. corporations failed
to offset the broad negative sentiment about fiscal woes in
Europe as Greek civil servants warned they could call more
strikes to oppose the government's deficit-cutting plan. For
details, see []
Investors also were disappointed that the weekend meeting
of the Group of Seven industrialized nations did not lead to
concrete action to tackle the sovereign debt problems of
countries such as Greece, Portugal and Spain.
U.S. Treasury debt prices, which move in the opposite
direction of their yield, edged higher amid the unease over the
fiscal soundness of highly indebted countries. []
Greek government bond yield spreads over German benchmarks
rose as investors fled the perceived weakness in
deficit-reduction plans and avoided assets deemed risky.
[]
"It's difficult enough for investors to digest when
companies can't meet obligations. When countries can't meet
their obligations, it sends more pronounced shivers through the
market," said Andre Bakhos, president of Princeton Financial
Group in North Brunswick, New Jersey.
"It hurts sentiment in the fact that the underlying global
fundamentals remain shaky."
The Dow Jones industrial average <> slipped 40.43
points, or 0.40 percent, to 9,971.80. The Standard & Poor's 500
Index <.SPX> dipped 1.48 points, or 0.14 percent, to 1,064.71.
The Nasdaq Composite Index <> eased 1.83 points, or 0.09
percent, to 2,139.29.
European shares added to steep declines from last week as
the sovereign debt problems weighed on banks and offset a rally
in defensive sectors like drugmakers and food producers.
[]
By 10 a.m. EST (1500 GMT), the pan-European FTSEurofirst
300 <> index slipped 0.1 percent at 971.27 points, after
hitting a three-month low at 967.85 points earlier.
The euro hovered near an 8-1/2 month lows versus the
greenback.
The euro <EUR=> was down 0.01 percent at $1.366, and the
dollar fell against a basket of major currencies, with the U.S.
Dollar Index <.DXY> dipped 0.13 percent at 80.333.
Against the yen, the dollar <JPY=> was down 0.13 percent at
89.21 from a previous session close of 89.330.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
off 1/32 in price to yield 3.58 percent.
Oil topped $71 a barrel, supported by the weaker U.S.
dollar and as some investors viewed the previous session's
decline to a near two-month low as a buying opportunity.
[]
Spot gold prices <XAU=> fell 55 cents to $1,064.40 an
ounce.
Earlier in Asia, Japan's Nikkei average <> fell 1.1
percent to a two-month closing low as exporters like Sony Corp
<6758.T><SNE.N> were clobbered by a strong yen. Asia Pacific
shares outside Japan as measured by MSCI <.MIAPJ0000PUS> fell
0.8 percent to its lowest levels since early September.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Editing by Jeffrey Benkoe)
