(Corrects to 8-month low for consumer sentiment slump, in
paragraph 6)
* Global stocks pare losses as fears of double dip ease
* Dollar hits fresh 8-month low vs yen after GDP data
* Bonds rise on slightly weaker-than-forecast U.S. GDP
* Oil pares losses as Midwest data spurs recovery hopes
(Adds close of European markets)
By Herbert Lash
NEW YORK, July 30 (Reuters) - Global stocks and the U.S.
dollar slid on Friday as investors trimmed risk exposure on
data showing the U.S. economy slowing a bit more than expected
while other news suggested a slow, steady recovery.
The dollar fell to multi-month lows against the Japanese
yen and gold rose back above $1,170 an ounce after data on U.S.
gross domestic product mostly confirmed slow growth for
investors. For details see: []
But European stocks recovered from a sharp fall to close
only slightly lower and U.S. stocks pared losses on separate,
mixed signals from U.S. data. [] []
The U.S. Commerce Department said GDP expanded at a 2.4
percent annual rate in the second quarter, less than the 2.5
percent pace analysts polled by Reuters said they expected.
Stocks on both sides of the Atlantic were down at one point
by 1 percent after the release of the GDP data, but a jump in
the Chicago Purchasing Managers Index suggested a slow but
steady economic recovery was spurring buying.
The business barometer rose to 62.3 in July, higher than a
forecast of 56.5. Yet in a separate report, consumer sentiment
slumped to an 8-month low, emblematic of a fragile economy.
Some analysts remained upbeat.
"The market had second thoughts on the data we had," said
Mike Lenhoff, chief strategist and head of research at Brewin
Dolphin Securities in London. "All the news is not in the
headline. The investment spending was strong."
Michael Woolfolk, senior currency strategist at BNY Mellon
in New York, said the Chicago PMI report showed there is
continued resilience in manufacturing and industry.
"We overreacted a bit to GDP, and that has faded now after
this release. I wouldn't characterize GDP as disappointing,
either," Woolfolk said.
Global stocks as measured by MSCI's all-country world index
<.MIWD00000PUS> and its emerging market index <.MSCIEF> both
trimmed losses to fall about 0.3 percent.
The FTSEurofirst 300 <> index of top European shares
fell 0.3 percent to close down at 1,043.66 points. The index
rose 5.3 percent in July, the most in four months.
Before 1 p.m., the Dow Jones industrial average <> was
down 13.51 points, or 0.13 percent, at 10,453.65. The Standard
& Poor's 500 Index <.SPX> was down 0.98 points, or 0.09
percent, at 1,100.55. The Nasdaq Composite Index <> was up
2.49 points, or 0.11 percent, at 2,254.18.
Dollar bears sold the U.S. currency versus the yen on news
of the GDP data. Analysts said the news follows a string of
recent weak U.S. data that has weighed broadly on the dollar.
"It's going to be very difficult for a (dollar) rally and
people are going to get more risk averse. You could see euro go
below $1.30 and the dollar fall below 86 yen," said Boris
Schlossberg, director of FX research at GFT Forex in New York.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.07 percent at 81.582.
The euro <EUR=> was down 0.26 percent at $1.3043, and
against the yen, the dollar <JPY=> was down 0.38 percent at
86.43.
Oil pulled back from losses that pushed benchmark crude
below $77 a barrel.
U.S. light sweet crude oil <CLc1> fell 38 cents to $77.98 a
barrel. ICE Brent <LCOc1> fell 11 cents to $77.47.
German government bond futures hit a one-week high as they
tracked a U.S. Treasuries rally.
The U.S. benchmark 10-year Treasury note <US10YT=RR> was up
20/32 in price to yield 2.91 percent.
Spot gold prices <XAU=> rose $12.42 to $1,178.80 an ounce.
Gold is down nearly 6 percent so far in July, on track for
its biggest monthly loss since December. Gold has slipped on
concern over euro zone sovereign debt levels, which sent the
metal to a record $1,264.90 an ounce in June. []
Aluminium rose to an 11-week high due to industrial
consumer buying, while copper reversed losses to hit a fresh
three-month high. []
Copper was on course for its biggest monthly gain in about
one year, thanks to improved risk appetite.
(To read Reuters' Global Investing Blog, double-click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog, double-click on http://blogs.reuters.com/macroscope; for
Hedge Fund Blog, double-click on
http://blogs.reuters.com/hedgehub)
(Reporting by Matthew Lynley, Vivianne Rodrigues and Ellen
Freilich in New York; Brian Gorman, Ian Chua and Jan Harvey in
London; Writing by Herbert Lash; Editing by Andrew Hay)
