* Global stocks down as growth fears feed investor angst
* Dollar falls on weaker-than-expected August jobs report
* Bond gains capped as weak U.S. labor data was priced in
* Crude falls as weaker demand offsets fall in inventories
(Recasts with U.S. markets, adds byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Sept 5 (Reuters) - Global stocks fell on Friday
after a surprisingly weak U.S. jobs report raised fears of
growing economic weakness worldwide, leading investors to cut
their appetite for riskier assets and buy safe-haven debt.
Evidence of slowing global demand helped push crude oil
down to a fresh five-month low and hammered industrial metals
after a hefty rise in copper inventories triggered a sell-off.
Copper and aluminum both tumbled to seven-month lows, while
lead and tin prices shed about 5 percent. Crude's fall to under
$106 a barrel extended the week's losses to 8 percent.
News that the U.S. unemployment rate soared to nearly a
five-year high last month of 6.1 percent from 5.7 percent in
July rattled equity investors and lured them into bonds.
The U.S. dollar fell against the euro for the first time in
seven sessions after a government report showed the U.S.
economy lost more jobs than expected in August.
European stocks fell more than 2 percent, capping their
biggest weekly decline in more than five years, and U.S. stocks
fell for a fifth straight day, although they pared bigger
early-session losses.
Investors shrugged off continued oil production problems in
the United States in the wake of Hurricane Gustav, which left
some 25 percent of U.S. crude production and 10 percent of its
refining idled and in slow recovery.
"The economy in the United States and Europe is turning bad
and people realize that the growth in the economies of China,
India and Brazil will not be enough to offset what looks like a
world economic contraction," said Kyle Cooper, director of
research at IAF Advisors in Houston.
Qualcomm <QCOM.O> was the top drag on Nasdaq, followed by
BlackBerry maker Research In Motion <RIM.TO><RIMM.O>. Investors
also sold-off shares of oil companies on signs a global
economic slowdown would reduce the demand for energy.
Qualcomm fell nearly 2 percent, Research in Motion slipped
more than 3 percent and Exxon Mobil <XOM.N> shed 1.4 percent.
Before 1 p.m., the Dow Jones industrial average <> was
down 12.05 points, or 0.11 percent, at 11,176.18. The Standard
& Poor's 500 Index <.SPX> fell 4.29 points, or 0.35 percent, at
1,232.54. The Nasdaq Composite Index <> shed 12.81 points,
or 0.57 percent, at 2,246.23.
Banks and energy stocks in Europe were among the
top-weighted losers.
The FTSEurofirst 300 <> index of top European shares
lost 2.2 percent at 1,125.48 points.
Nokia <NOK1V.HE> fell nearly 10 percent after the world's
top mobile phone maker warned it would lose market share this
quarter as it refused to participate in a price war waged by
some rivals to combat weak economies.
Banks, miners and energy shares were among top-weighted
losers on the index, with commodity stocks also facing pressure
from a sharp decline in prices of metals and crude.
UBS AG <UBSN.VX> and Barclays <BARC.L> slipped 3.6 percent
percent each, Royal Bank of Scotland <RBS.L> dropped 3.5
percent and HBOS <HBOS.L> lost 2.5 percent.
Among miners, Kazakhmys <KAZ.L> dropped 8.2 percent,
Antofagasta <ANTO.L> shed 7 percent, Xstrata <XTA.L> slipped
5.6 percent and Anglo American <AAL.L> fell 5.2 percent.
"You are looking at a weak economic scenario, the financial
liquidity crisis is not solved and you are looking at weak
earnings reports," said Philip Isherwood, strategist at
Dresdner Kleinwort.
Fears over the U.S. labor market and the general health of
the U.S. economy eroded some support for the dollar.
The dollar rose against major currencies, with the U.S.
Dollar Index <.DXY> up 0.08 percent to 78.941. Against the yen,
the dollar <JPY=> fell 0.46 percent to 107.08.
The euro <EUR=> fell 0.06 percent at $1.4241.Dollar:
Euro zone government bonds rallied, with 10-year notes
yielding below 4 percent to their lowest level since
mid-April.
U.S. Treasury debt prices shed early gains to turn lower as
stocks pared losses.
U.S. Treasury debt prices were mixed.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
3/32 to yield 3.63 percent. The 30-year U.S. Treasury bond
<US30YT=RR> rose 3/32 to yield 4.26 percent.
Oil prices fell more than $2 on flagging U.S. demand and
from other consumer nations.
U.S. light sweet crude oil <CLc1> fell $2.10 to $105.79 a
barrel. Spot gold prices <XAU=> fell 5 cents to $794.50 an
ounce.
Gold rose as the dollar declined on the U.S. jobs report.
World stocks extended losses to fresh two-year lows while
save-haven government bonds rallied on Friday after a
surprisingly weak U.S. jobs report deepened worries about the
health of the global economy.
The U.S. unemployment rate shot up to 6.1 percent in
August, its highest in nearly five years, while the economy
lost a higher-than-expected 84,000 jobs last month.
(Reporting by Ellis Mnyandu, Wanfeng Zhou, John Parry and
Carole Vaporean in New York and Atul Prakash, Matthew Robinson
and George Matlock in London)
(Writing by Herbert Lash)
