* Ireland turns spotlight back onto euro zone debt
* Disappointing Cisco outlook weighs on Wall St
* Gold erases gains as dollar strengthens
(Updates with European markets' close)
By Walter Brandimarte
NEW YORK, Nov 11 (Reuters) - The euro fell to a five-week
low on Thursday on concerns about Ireland's ability to repay
its debt while earnings fears knocked U.S. stocks lower after a
technology bellwether gave a dismal earnings outlook.
Gold erased initial gains as the dollar rose against major
currencies. Oil prices were little changed, with news of strong
Chinese demand offset by the rise of the greenback.
Yields on 10-year Irish bonds rose to a record high over
comparable German debt as investors speculated Ireland will
soon need financial help to service its debt. For details, see
[].
Ireland's Finance Minister Brian Lenihan admitted the surge
in borrowing costs had become "very serious," but European
officials denied for a second day that Dublin was seeking
financial aid -- echoing the denials heard six months ago when
Greece needed an EU/IMF bailout.
"Europe never fully addressed these problems, and it's
clear solvency issues in Ireland have not been resolved," said
Marc Chandler, global head of currency strategy at Brown
Brothers Harriman, who sees the euro at $1.33 by the end of
2010.
The euro <EUR=> fell as low as $1.3642, a five-week low,
and was last down 0.89 percent at $1.366. It also posted losses
against the yen <EURJPY=> and hit a seven-week low against
sterling <EURGBP=>.
"The euro can't sustain even modest upticks right now, and
a fall below $1.3650 could open up another two-cent decline,"
Harriman added.
The dollar strengthened against major currencies, with the
U.S. Dollar Index <.DXY> up 0.69 percent. Also supporting the
greenback was a U.S. think tank report saying the Federal
Reserve may scale back its latest plan to buy government
bonds.
Against the Japanese yen, the dollar <JPY=> was up 0.21
percent at 82.46.
Europe's woes diverted attention from a G20 summit in South
Korea, where major rich and developing countries tried to
hammer out an agreement to reduce global economic imbalances
and avoid competitive currency devaluations. []
TECH WEIGHS ON WALL ST
Technology shares led a slide on Wall Street after a
disappointing outlook from Cisco Systems Inc <CSCO.O>.
[]
The Dow Jones industrial average <> fell 90.44 points,
or 0.8 percent, to 11,266.60, while the Standard & Poor's 500
Index <.SPX> lost 8.17 points, or 0.67 percent, to 1,210.54.
The Nasdaq Composite Index <> was down 28.67 points, or
1.11 percent, at 2,550.11.
Cisco's shares fell more than 15 percent after Chief
Executive John Chambers expressed caution about short-term
challenges in Europe and purchases by public-sector customers.
European stocks ended little changed, with investors
cautious about the situation in Ireland. The FTSEurofirst 300
<> index of top European shares provisionally edged 0.03
percent lower after falling 0.7 percent on Wednesday. The index
is up 71 percent since a record low in March 2009 but only 6
percent higher in 2010.
"It's time to book profits, that's what we're doing. The
market is ripe for a correction," said Jean-Yves Dumont, head
of asset allocation strategy and funds at Dexia Asset
Management, which turned "underweight" on equities on
Wednesday.
Gold prices <XAU=> were slightly up in volatile trade, with
the strength of the greenback taking off some of its shine.
Prices for the metal rose 0.2 percent to $,1405.90 an ounce.
U.S. crude oil <CLc1> was practically unchanged at $87.86 a
barrel.
The U.S. bond market was closed for Veterans Day.
(Additional reporting by Edward Krudy and Steven C. Johnson in
New York, Blaise Robinson in London; Writing by Walter
Brandimarte; Editing by Kenneth Barry)
