* Global stocks extend losses on fears of double dip
* Dollar hits fresh 8-month low vs yen after GDP data
* Bonds rise on slightly weaker-than-forecast U.S. GDP
* Oil falls below $77 barrel on economic growth worries
(Adds opening of U.S. markets; changes dateline, previous
LONDON and byline)
By Herbert Lash
NEW YORK, July 30 (Reuters) - Global stocks fell and the
U.S. dollar extended losses against the Japanese yen on Friday
as investors sought safety after a report showed the U.S.
economy slowed a bit more than expected in the second quarter.
Government debt on both sides of the Atlantic rose after
the U.S. Commerce Department said gross domestic product
expanded at a 2.4 percent annual rate, less than the 2.5
percent pace analysts polled by Reuters said they expected.
U.S. Treasuries, German Bund futures and UK gilt futures
extended gains while European stocks slipped and oil fell below
$77 a barrel, extending an earlier drop, on news of the data.
The slowdown in the U.S. recovery had been flagged in
recent weeks by a stream of weak economic data, adding to fears
of those we see the economy slipping back into recession -- the
much talked about double dip.
"Oil is coming down further after the data was published,
probably on the fear out there of a double-dip," said Daniel
Briesemann, analyst at Commerzbank in Frankfurt.
U.S. September crude <CLc1> shed $1.42 to $76.94 a barrel.
ICE Brent <LCOc1> fell $1.25 to $76.34.
Global stocks as measured by MSCI's all-country world index
<.MIWD00000PUS> fell 0.9, while its emerging market index
<.MSCIEF> dropped 0.8 percent.
The Dow Jones industrial average <> was down 81.74
points, or 0.78 percent, at 10,385.42. The Standard & Poor's
500 Index <.SPX> was down 9.92 points, or 0.90 percent, at
1,091.61. The Nasdaq Composite Index <> was down 23.76
points, or 1.06 percent, at 2,227.93.
Bond yields rose while their price, which moves inversely,
fell.
The 30-year Treasury bond <US30YT=RR> was up 1-4/32, its
yield easing to 4.01 percent from 4.08 percent on Thursday.
September Bund futures <FGBLc1> climbed to 128.53, up 47
ticks on the day from a pre-data level of 128.41.
September gilt futures <FLGU0> extended gains by around 10
ticks to hit a session high of 121.49 after the data.
The pan-European FTSEurofirst 300 <> extended losses,
falling almost 1 percent to 1,036.57 points.
Even though U.S. economic growth slowed, capital investment
driven by business spending boosted imports to their fastest
pace since the first quarter of 1984, a possible silver lining.
But the number was not encouraging.
"This is going to reinforce the sense people have that yes
companies have cut costs, yes that has helped earnings, but the
revenue line at some point has to get better and these GDP
numbers are not moving in that direction," Subodh Kumar, chief
investment strategist at Subodh Kumar & Associates in Toronto,
The markets may test the July lows, but probably not go
below that, Kumar said.
The dollar extended losses against the yen to hit a session
low beneath 86 yen, and the greenback pared gains versus the
euro.
The dollar was down 0.5 percent at 86.31 yen <JPY=>, after
hitting a fresh eight-month low of 85.95 yen, according to
Reuters.
The dollar also fell to a six-month low against the Swiss
franc earlier of 1.0364 francs <CHF=>. That also prompted the
Swiss currency to rise against the euro <EURCHF=>.
The euro fell 1.2 percent versus the yen <EURJPY=R> to
112.10 yen and 0.6 percent versus the dollar to $1.3003 <EUR=>.
(Reporting by Vivianne Rodrigues, Ellen Freilich in New York;
Ian Chua in London; Writing by Herbert Lash; Editing by
Theodore d'Afflisio)
