* U.S., European stocks slip on global slowdown fears
* Dollar weakens vs yen after weak U.S. ISM services data
* Safe-haven bidding for bonds offset by supply worries
* Oil slides on profit-taking after 10 percent surge
(Recasts with U.S. markets, adds byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Nov 5 (Reuters) - Stocks slid around the world
and risk aversion rose on Wednesday as a raft of dire economic
and corporate news sparked by the financial crisis greeted U.S.
president-elect Barack Obama a day after his historic victory.
Obama's decisive win lifted shares in Asia but European and
U.S. stocks fell while euro zone and U.S. government debt
prices rose on news that supported flight-to-quality flows.
The latest economic data soured some of investors' taste
for the U.S. currency, however. It fell against the yen but
retained gains against the euro. The dollar had been higher on
low risk appetite amid fears of a prolonged global crisis.
A slew of European bank results did little to lift a gloom
that has darkened by a recurring trend of falling profits and
rising provisions stemming from the deepening slowdown.
Euro zone service sector activity touched a fresh decade
low in October, a final index reading showed, while a U.S.
non-manufacturing report displayed weakness all around, with
employment at its lowest on record and new orders tumbling.
"The surveys continue to show record pessimism," Guillaume
Menuet, an economist at Merrill Lynch in London, said about the
European services data. "Sentiment has continued to deteriorate
and it's obviously bad news for the economy in the fourth
quarter."
Company reports showed little relief, highlighting the
daunting task Obama faces as he tries to lead the United States
and the world out of the worst financial crisis since the
1930s.
Finance company GMAC LLC reported a $2.52 billion loss in
the third quarter, hurt by slumping housing and auto markets,
and said its Residential Capital LLC mortgage unit may fail.
United Technologies Corp <UTX.N> was among the biggest
drags on the Dow after the diversified manufacturer said it
stood by its 2008 profit forecast, though the strengthening
dollar could put results near the low end of the range.
United Technologies fell 4.4 percent.
Cisco Systems <CSCO.O> was down 3.2 percent ahead of
quarterly results expected after the bell.
Before 1 p.m. (1800 GMT), the Dow Jones industrial average
<> was down 288.80 points, or 3.00 percent, at 9,336.48.
The Standard & Poor's 500 Index <.SPX> was down 31.16 points,
or 3.10 percent, at 974.59. The Nasdaq Composite Index <>
was down 54.96 points, or 3.09 percent, at 1,725.16.
European shares fell after six straight rising sessions as
commodity shares tracked sharp losses in oil and metal prices.
ArcelorMittal <MTP.PA><ISPA.AS>, the world's No. 1
steelmaker, forecast a weaker final quarter, slashed output and
froze growth plans in the face of a global slowdown.
Its shares fell almost 16 percent.
Commodity stocks were one of the biggest sectoral losers on
the index as crude oil prices fell about 6 percent, and copper,
zinc and nickel prices slipped by between 3.7 and 6 percent.
"Nothing immediately is going to change as a result of the
election victory. We still haven't broken the downtrends," said
Darren Winder, head of economics and strategy at Cazenove.
The dollar slid further, down 0.8 percent at 98.82 against
the yen <JPY=> and off 0.3 percent at $1.2987 to the euro
<EUR=>.
Oil fell more than 5 percent as a U.S. government report
showed rising fuel stockpiles and weak demand in the world's
top energy consumer. U.S. light sweet crude oil <CLc1> fell
$4.11 to $66.42 a barrel.
Spot gold prices <XAU=> fell $23.05 to $740.85 an ounce.
Government debt prices mostly rose on safe-haven flows out
of sliding stocks.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
little changed in price to yield 3.72 percent, and the 2-year
U.S. Treasury note <US2YT=RR> also was little changed to yield
1.38 percent.
The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> rose 2.3 percent for a seventh consecutive
session, while Tokyo's Nikkei <> rose 4.5 percent.
(Reporting by Leah Schnurr, Nick Olivari and Chris Reese in
New York and Alex Lawler, Atul Prakash, Emelia Sithole-Matarise
and Jan Harvey in London; Writing by Herbert Lash; Editing by
James Dalgleish)
