* Euro falls, still under pressure
* US stocks drift down on Lowe's earnings outlook
* Oil slips to below $70 per barrel; gold steadies
(Updates with U.S. markets, changes byline, dateline, previous
LONDON)
By Jennifer Ablan and Claire Milhench
NEW YORK/LONDON, May 17 (Reuters) - U.S. stocks dropped on
Monday following disappointing earnings outlooks, and the euro
slipped as fears persisted that a euro-zone debt crisis would
worsen, crimping growth in the region.
In early New York trade, the euro <EUR=> was down 0.1
percent at $1.2339 from a previous session close of $1.2360.
But it reached $1.2234 earlier in the session.
On Sunday, German Chancellor Angela Merkel said that a $1
trillion European Union-International Monetary Fund bailout
plan had only bought the euro zone time to tackle its
fundamental problem: a yawning gap between its strongest and
weakest economies [].
The Dow Jones industrial average <> was down 51.54
points, or 0.49 percent, at 10,568.62. The Standard & Poor's
500 Index <.SPX> fell 5.46 points, or 0.48 percent, at
1,130.22. The Nasdaq Composite Index <> dipped 5 points,
or 0.21 percent, at 2,341.85.
World financial markets saw limited gains on persistent
concerns that the euro-zone's soverign debt issues and planned
auesterity measures would hurt growth.
Adding to the sour sentiment, Lowe's Cos <LOW.N> the No. 2
U.S. home improvement chain, gave a disappointing profit
forecast for the rest of the year. Lowe's, down about 4
percent, sounded a note of caution about the pace of a U.S.
economic recovery.
Economic data on Monday from the New York Federal Reserve
showed manufacturing in New York State continued to grow in
May, but at a slower pace. The gauge also came in far below
economists' forecasts [].
"It is probably a good excuse for a sell-off," said Mike
Lenhoff, chief strategist at wealth manager Brewin Dolphin. "We
have a recovery but it is a feeble one. If you load onto that
recovery a severe dose of fiscal austerity, the prospects then
for a sustainable recovery (are strained)."
MAJOR EQUITY MARKETS SEESAW
Other major equity markets traded between gains and losses,
with more of the latter.
The FTSEurofirst 300 <> index of top European shares
fell 1.1 points, or 0.11 percent, while world stocks as
measured by the MSCI All-Country index <.MIWD00000PUS> were
down 1.23 percent. The more volatile emerging markets index
<.MSCIEF> was down 2.26 percent.
In Japan the Nikkei <> fell more than 225 points, or
2.17 percent, to a 10-week closing low, mirroring falls in the
rest of the region as investors ignored encouraging economic
data from the United States, Japan and Singapore
[] [] [].
Weakness in the euro and the pound helped the dollar index
<.DXY>, which was up 0.59 percent at 86.575 from a previous
session close of 86.095.
U.S. Treasury debt prices were higher.
After rising nearly a point in the previous session, the
benchmark 10-year note <US10YT=RR> rose 3/32 on Monday, its
yield easing to 3.44 percent. Two-year notes <US2YT=RR> were
unchanged in price, yielding 0.78 percent.
In energy and commodities prices, U.S. light sweet crude oil
<CLc1> fell $1.60, or 2.21 percent, to $70.01 per barrel, while
spot gold prices <XAU=> rose 71 cents, or 0.06 percent, to
$1233.20. The Reuters/Jefferies CRB Index <.CRB> was down 3.76
points, or 1.45 percent, at 254.79.
(Additional reporting by Blaise Robinson, Jeremy Gaunt and
Neal Armstrong in London; Editing by Padraic Cassidy)
