* World stocks down after U.S. GDP data
* Safe-haven dollar higher vs currency basket
* Consumer confidence, housing data fail to spur optimism
(Updates with U.S. markets, adds byline, dateline, previous:
LONDON)
By Manuela Badawy
NEW YORK, Nov 24 (Reuters) - World stocks weakened on
Tuesday after data showed the U.S. economy grew at a slower
pace than expected in the third quarter, pushing the dollar
higher and suggesting a lethargic economic recovery.
The U.S. data showed growth at a 2.8 percent annual rate
rather than a previous forecast of 3.5 percent. It was still
the fastest pace since the third quarter of 2007, probably
ending the most painful U.S. recession in 70 years.
[]
Yet investors need to see stronger growth to justify the
rally seen in stocks and high-risk high-yielding assets.
"If we want to get this economy going, if we want to get
this economy recovering and add jobs, we're going to want to
see better numbers than we are seeing," said Richard Sparks, a
senior equities analyst with Schaeffer's Investment Research in
Cincinnati.
For a graphic on the U.S. third-quarter GDP, click on
http://graphics.thomsonreuters.com/119/US_GDPTR1109.gif
MSCI's all-country world stock index <.MIWD00000PUS> was
down 0.61 percent, yet it has gained 31.02 percent so far this
year.
U.S. stocks fell after the economic data as investors look
for more robust growth to justify additional stock gains. The
Dow hit a 13-month high on Monday and the S&P 500 has risen 22
percent this year.
The Dow Jones industrial average <> was down 0.39
percent, at 10,410.44. The Standard & Poor's 500 Index <.SPX>
was down 0.26 percent, at 1,103.40, and the Nasdaq Composite
Index <> was down 0.54 percent, at 2,164.24.
Other U.S. data showed house prices rose for the fifth
month in September, but the pace of appreciation was less than
expected, according to Standard & Poor's/Case-Shiller report.
U.S. consumer confidence was up in November, after an
unexpected drop in October, but still pointed to weak labor
market sentiment.
"The index showed unexpected marginal improvement, but
there seems to be no improvement whatsoever in the perception
of the labor market which is probably the key issue now. The
good news is it can't get any worse," said Pierre Ellis, senior
economist at Decision Economics in New York.
DOLLAR DAY
The U.S. dollar firmed against a basket of currencies and
weakened against the Japanese yen as the economic data
rekindled the safe-haven allure of both the dollar and yen.
That reduced investor appetite for riskier assets like stocks
and commodities, including higher-yielding currencies.
The dollar index <.DXY> was 0.15 percent at 75.194, while
the euro <EUR=> was down 0.13 percent at $1.4946. Against the
yen, the dollar <JPY=> was down 0.46 percent at 88.54.
Meanwhile, U.S. Treasury debt prices gained slightly amid
doubts about the strength of the economic recovery. Market
players were holding back ahead of an auction of $42 billion of
five-year Treasury notes.
Benchmark 10-year Treasury notes <US10YT=RR> were trading
3/32 higher in price to yield 3.34 percent, down from 3.35
percent late on Monday.
Later in the session, the Federal Reserve will release
minutes of its Nov. 3-4 meeting and markets will look for any
hints on when and how the Fed will withdraw extraordinary
economic support measures. The minutes also include economic
projections.
Earlier, the pan-European FTSEurofirst 300 <> index
of top shares closed 0.7 percent lower at 1,016.66 points after
rising to a high of 1,025.17 earlier in the session.
The index has gained 57 percent since falling to a record
low in early March and is up 22 percent for the year.
Many global stock investors are being cautious heading into
the year-end, wanting to lock in profits after a very good run
in 2009 while also worrying about the true state of the world
economy.
Japan's Nikkei <.225> hit its lowest close in four months,
down 1 percent on the day. Japan's current concerns are focused
on worries financial firms will tap the market for equity
financing and on a stronger yen hurting the shares of
exporters.
(Additional reporting by Ellen Freilich; Editing by Andrew
Hay)
((manuela.badawy@thomsonreuters.com; +1 646-223-6055;
Reuters Messaging: manuela.badawy.reuters.com@reuters.net))
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