* Euro falls, still under pressure after four-year low
* U.S. stocks down more than 1 pct
* Oil hits 5-year low, slips below $70 per barrel
(Recasts, adds close of European markets, updates markets,
adds investor quote)
By Jennifer Ablan
NEW YORK, May 17 (Reuters) - The euro touched a four-year
low on Monday on persistent fears the euro zone debt crisis
will worsen and stifle global growth, and fears reverberated
through financial markets, sending the price of oil and other
commodities lower and dragging down equities around the world.
U.S. shares slid more than 1 percent as plunging commodity
prices hit energy and materials shares. The price of crude oil
hit a five-month low before slightly paring losses, weighed
down by fears of the potential impact of Europe's unresolved
sovereign debt crisis on economic demand.
The price of copper fell more than 5 percent and other
industrial metals also tumbled as the dollar strengthened
versus the euro.
The euro <EUR=> was down 0.47 percent at $1.2302 from a
previous session close of $1.2360, after earlier falling to a
four-year low of $1.2234.
European equities managed to close only slightly lower,
with declines in mining shares cushioned by gains in defensive
shares such as food producers and drug makers. The pan-European
FTSEurofirst 300 index <.FTEU> closed down 0.12 percent at
1,013.06 points.
U.S. government bond prices rose as investors sought
safe-havens.
On Sunday, German Chancellor Angela Merkel said that the $1
trillion European Union-International Monetary Fund bailout
plan agreed a week earlier has only bought the euro zone time
to tackle its fundamental problem: a yawning gap between its
strongest and weakest economies [].
On Wall Street, the Dow Jones industrial average <> was
down 144.43 points, or 1.36 percent, at 10,475.73, while the
Standard & Poor's 500 Index <.SPX> was down 16.64 points, or
1.47 percent, at 1,119.04. Energy was the biggest drag, with
the S&P Energy index <.GSPE> down 2.31 percent. Meanwhile, the
Nasdaq Composite Index <> was down 32.67 points, or 1.39
percent, at 2,314.18.
A gauge of of manufacturing in New York State showed a
slower growth rate in May, raising concerns about the economic
recovery. [].But fears of fallout from the euro
zone debt crisis weighed most heavily on investor sentiment.
It's more of the unrest in Europe and how that's going to
unfold," said Alan Lancz, president at Alan B. Lancz &
Associates Inc in Toledo, Ohio.
"It's a matter of executing and building in the austerity
plans and putting them in place, so that you're not just
throwing a lot of money at a situation with a lot of debt and
increasing the problem without changing the underlying root of
the problem."
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. The chief executive of
Lowe's, Robert Niblock, said on a call with analysts that some
estimates of economic growth have started to come down.
Shares of Lowe's fell over 3.5 percent.
"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
World stocks as measured by the MSCI All-Country index
<.MIWD00000PUS> were down 1.54 percent. The more volatile
emerging markets index <.MSCIEF> was down 2.58 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 0.64 percent at 86.642 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 12/32 on Monday, its
yield easing to 3.41 percent. Two-year notes <US2YT=RR> were up
1/32, with the yield at 0.77. The 30-year U.S. Treasury bond
<US30YT=RR> was up 25/32, with the yield at 4.30 percent.
In energy and commodities prices, U.S. light sweet crude oil
<CLc1> fell $1.90, or 2.65 percent, to $69.71 per barrel, while
spot gold prices <XAU=> fell $7.30, or 0.59 percent, to
$1,225.20.
The Reuters/Jefferies CRB Index <.CRB> was down 4.51
points, or 1.74 percent, at 254.04.
(Additional reporting by Leah Schnurr in New York and Blaise
Robinson, Jeremy Gaunt and Neal Armstrong in London; Editing by
Leslie Adler)
