GLOBAL MARKETS-Shares, oil prices fall on dismal economic data

                                
 * Global shares fall on fresh signs of economic weakness
                                
 * Yen, dollar gain as weak U.S. data stoke risk-aversion
                                
 * Oil slides, pressured by gloomy data about U.S. economy
                                
 * Bond yields mostly lower after more gloomy economic data
 (Recasts with U.S. markets, changes dateline; previous
LONDON)
                                
 By Herbert Lash
                                
 NEW YORK, Jan 29 (Reuters) - Further evidence of worldwide
economic weakness pushed oil prices and global shares lower on
Thursday, while concerns about the amount of debt needed for
government stimulus plans weighed on U.S. and euro zone bonds.
                                
 The yen and dollar rose as grim economic data in Europe and
the United States kept investors wary of risk even as
governments pursued plans to boost growth. For more details,
see  [ID:nN29284207]
                                
 Oil fell below $42 a barrel, pressured by the gloomy
economic data. [ID:nSP148153]
                                
 Dismal earnings from U.S. companies including Allstate Corp
<ALL.N> and results in Europe from drugmaker AstraZeneca's
<AZN.L> also weighed on world equity markets that had rallied
the previous three sessions.
                                
 The inability of stocks to sustain a rally puts in jeopardy
the market's attempt to avoid a loss for the month of January,
which is often viewed as a harbinger for the year. The
benchmark S&P 500 index <.SPX> is down more than 5 percent so
far this year.
                                
 Allstate shed 20 percent after the largest publicly traded
U.S. home and auto insurer posted a hefty loss on soured
investments. [ID:nN28545756]. Allstate helped drag the S&P
financial index <.GSPF> down more than 5 percent and halted
this week's relief rally for banks.
                                
 Worries that President Barack Obama's $825 billion stimulus
package could face a bumpy road also weighed on sentiment after
the U.S. House of Representatives passed it late Wednesday even
though every Republican who voted opposed the measure.
                                
 The Senate will begin debate next week. [ID:nLT460265].
                                
 About 1 p.m., the Dow Jones industrial average <.DJI> was
down 162.64 points, or 1.94 percent, at 8,212.81. The Standard
& Poor's 500 Index <.SPX> was down 21.09 points, or 2.41
percent, at 853.00. The Nasdaq Composite Index <.IXIC> was down
36.50 points, or 2.34 percent, at 1,521.84.
                                
 The failing health of the U.S. economy took center stage
with news that unemployment was at a record peak in January and
orders for pricey items such as appliances and computers
falling for a fifth straight month in December.[ID:nN29272638]
                                
 Other data also showed the U.S. economy in steep decline,
with sales of new single-family homes at their lowest levels
since records started in 1963.
                                
 "All the data through December is reflecting the credit
shock that occurred through the fall, and it is indicative of
an economy that is contracting at a very rapid pace," said
Michael Darda, chief economist at MKM Partners LLC in
Greenwich, Connecticut.
                                
 European data also was grim. German unemployment rose
nearly twice as much as expected in January in the biggest
increase in almost four years, a sign that Europe's largest
economy is in a deep recession. [ID:nLT496491]
                                
 Euro zone economic sentiment hit record lows in January and
inflation expectations fell, data showed, boosting the case for
the European Central Bank to cut rates more. [ID:nLT23481]
                                
 The ECB has not ruled out cutting rates to a record low or
employing "non standard" tactics to fight the economic crisis,
President Jean-Claude Trichet said. [ID:nLT740817]
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
fell 1.8 percent to close at 796.49.
                                
 "Economic data continues to disappoint," said Georgina
Taylor, equity strategist at Legal & General Investment
Management. "Some people see it stabilizing, but we don't see
that."
                                
 European shares fell broadly, with only two of the
pan-European index's 38 sectors posting gains.
                                
 AstraZeneca fell 6.3 percent after the drugmaker reported
lower fourth-quarter profits, announced 6,000 job cuts and
issued a cautious 2009 sales outlook.
                                
 U.S. government debt prices fell. The benchmark 10-year
U.S. Treasury note <US10YT=RR> slipped 20/32 in price to yield
2.74 percent. The 30-year U.S. Treasury bond <US30YT=RR> shed
49/32 in price to yield 3.49 percent.
                                
 The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.78 percent at 85.247. Against
the yen, the dollar <JPY=> fell 0.72 percent at 89.73.
                                
 The euro <EUR=> fell 1.28 percent at $1.2967.
                                
 U.S. light sweet crude oil <CLc1> fell 36 cents to $41.80 a
barrel.
                                
 Spot gold prices <XAU=> rose $11.20 to $896.35 an ounce.
                                
 The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> pushed up 1.4 percent and Japan's Nikkei
average <.N225> rose 0.6 percent.
 (Reporting by Leah Schnurr, John Parry, Steven C. Johnson in
New York; Lucia Mutikani in Washington; Brian Gorman and Joe
Brock, Ian Chua in London; Jan Strupczewski in Brussels; James
Mackenzie in Paris; writing by Herbert Lash; Editing by Kenneth
Barry)