* 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
* Bonds fall on data, gold jumps on flight to quality
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Jan 29 (Reuters) - Global share prices fell and
oil eased on Thursday after dismal economic data indicated the
depth of the recession, while Treasury bond prices eased amid
concerns about the U.S. government's growing debt needs.
The yen and dollar rose as news of U.S. and European
economic weakness kept investors wary of risk even as
governments pursued plans to boost growth. For more details,
see []
Oil dipped below $42 a barrel, pressured by the gloomy
data, and gold turned sharply higher on the back of
flight-to-quality buying. [] []
Disappointing earnings from U.S. companies, including
Allstate Corp <ALL.N,> and results in Europe from drugmaker
AstraZeneca <AZN.L> also put a damper on world equity markets,
which had rallied the previous three sessions.
The inability of stocks to sustain the rally punctured
investors' hopes of posting a January gain, which is often seen
as a harbinger for the year. The benchmark S&P 500 index <.SPX>
is off 6.4 percent so far this year.
Allstate shed 21 percent after the largest publicly-traded
U.S. home and auto insurer posted a hefty loss on soured
investments. [] Allstate helped drag the S&P
financial index <.GSPF> down 8.4 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 in the Senate 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 on the plan next week.
[]
The Dow Jones industrial average <> closed down 226.44
points, or 2.7 percent, at 8,149.01. The Standard & Poor's 500
Index <.SPX> fell 28.95 points, or 3.31 percent, at 845.14. The
Nasdaq Composite Index <> shed 50.50 points, or 3.24
percent, at 1,507.84.
"Overall we don't see much relief (for the economy) until
much later this year," said Tim Quinlan, economic analyst at
Wachovia Securities in Charlotte, North Carolina. "We are
passing through the darkest part of the storm right now."
The frailty of the U.S. economy took center stage after
data showed unemployment at a record high in January and orders
for items such as appliances and computers falling for a fifth
straight month in December. []
Sales of new single-family homes falling to their lowest
levels since records started in 1963 also pointed to an economy
in steep decline.
European data was also grim as 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. []
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. []
The FTSEurofirst 300 <> index of top European shares
fell 1.8 percent to close at 796.49. Only two of the index's 38
sectors posted 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.
Crude losses were limited by a potential strike by U.S. oil
refinery workers and anticipation that production cuts by the
Organization of Petroleum Exporting Countries could further
tighten supplies by spring.
U.S. crude <CLc1> fell 72 cents to settle at $41.44 a
barrel. London Brent <LCOc1> settled up 50 cents to $45.40.
The dollar gained on flight-to-quality buying and the euro
was pummeled.
"The euro is getting pounded because it is not so clear
that officials will be able to coordinate effective policy in
this crisis," said Boris Schlossberg, chief currency strategist
at GFT Forex in New York.
"You see flows into the dollar because there's a greater
sense of confidence that the United States will persevere."
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.84 percent at 85.295. Against
the yen, the dollar <JPY=> slipped 0.55 percent at 89.88.
The euro <EUR=> fell 1.29 percent at $1.2965.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
1-20/32 in price to yield 2.85 percent. The 30-year U.S.
Treasury bond <US30YT=RR> fell 3-24/32 in price to yield 3.6
percent.
Spot gold prices <XAU=> rose $22.90 to $908.05 an ounce.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> pushed up 1 percent, while Japan's Nikkei
average <> 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 Gary
Crosse)
