* Bleak U.S. services data pressures stock markets
* Goldman Sachs report gives boost to U.S. dollar
* Copper hits 10-month highs
(Updates with closing prices)
By Manuela Badawy
NEW YORK, Aug 5 (Reuters) - Stock prices fell worldwide on
Wednesday after data showed the U.S. services sector contracted
at a faster clip than expected, stoking fears that the pace of
recovery from recession may be slower than hoped.
However, a late afternoon report by investment bank Goldman
Sachs that raised its U.S. real economic growth forecast for
the second half of 2009 from 1 percent to 3 percent spurred
optimism in risk-hungry investors who bought up the euro versus
the safe-haven U.S. dollar.
The Dow Jones industrial average <> closed 0.42 percent
lower at 9,280.97, the Nasdaq Composite Index <> fell 0.91
percent at 1,993.05 and the S&P 500 index <.SPX> gave up 0.29
percent at 1,002.72, while the FTSEurofirst 300 <> index
of top European shares eased 0.55 percent to 934.47.
The U.S. Institute for Supply Management's services index
contracted in July at a faster pace than in June, below
analysts' expectations. For story see [].
The services sector represents about 80 percent of U.S.
economic activity, including businesses such as banks,
airlines, hotels and restaurants.
"We're looking at a U-shaped recovery, which means that
getting off the bottom is going to be a lot more difficult than
people are anticipating in the market," said Doug Roberts,
chief investment strategist at Channel Capital Research in
Shrewsbury, New jersey.
MSCI's main world stock index <.MIWD00000PUS> fell 0.4
percent, while MSCI's emerging markets stock index <.MSCIEF>
shed 0.39 percent, yet both remained close to a 10-month peak
hit the previous session.
The euro hit a session high at $1.4446 <EUR=>, the highest
level since December. It was up 0.3 percent from late Tuesday
as investors bought up the euro zone single currency. The
dollar index <.DXY> dropped 0.24 percent at 77.578. Against the
yen, the dollar fell 0.3 percent at 94.96 yen <JPY=>.
U.S. Treasury debt prices fell, with the benchmark 10-year
Treasury note <US10YT=RR> down 19/32 for a yield of 3.76
percent versus 3.69 percent on Tuesday.
New orders received by U.S. factories unexpectedly rose in
June, but this news did little to improve investors' skepticism
about the strength of the economic recovery.
JOBS REPORTS IN FOCUS
Employment reports released earlier on Wednesday showed a
higher-than-expected loss of U.S. private-sector jobs in July,
while planned layoffs at U.S. firms increased during the same
period for the first time in six months, suggesting the labor
market remains persistently weak. []
This data bodes badly for the closely watched and more
comprehensive U.S. nonfarm payrolls report for July due on
Friday, which also includes public sector jobs.
"January of this year will, by year-end, prove itself the
worst month of 2009 in terms of nonfarm jobs lost with the
exception of the month of June," said Kathryn Rooney, senior EM
macroeconomic strategist at Bulltick Capital Markets in Miami.
Unemployment is a lagging indicator, so some six months
after the U.S. economy has touched bottom, the market can
expect the unemployment rate to start improving, which will be
in early 2010, she added.
Among commodities, U.S. crude oil <CLc1> settled 55 cents
higher at $71.97 a barrel supported by a weakening of the U.S.
dollar and a rally on heating oil futures <HOU9>, which rose to
their highest since early November.
Copper <MCU3=LX> hit 10-month highs at $6,235 a tonne. The
metal, used in power and construction, is up about 50 percent
since early April, when markets started to think the worst of
the downturn could be over. Prices have doubled so far this
year.
In the euro zone, the deep slowdown in the services sector
eased in July, further supporting the recovery theme, although
retail sales in June fell unexpectedly.
Earlier, Japan's Nikkei average <> fell 1.2 percent as
investors moved to lock in profits after days of rises that
pushed the benchmark to successive 10-month highs.
(Additional reporting by Mary Rowe; Editing by James
Dalgleish)
