(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, April 8 (Reuters) - Global stocks slipped and the
dollar rose on Tuesday amid fresh signs of slumping housing
markets on both sides of the Atlantic and nagging concerns
about the impact of a credit crisis on world economies.
Sterling fell to an 11-year low on weak British housing
data and U.S. Treasury bond prices rose as disappointing
results at the start of the U.S. earnings season stoked
recession fears and sparked the buying of save-haven debt.
The global credit crisis returned to haunt markets, a day
after a capital infusion into troubled U.S. savings and loan
Washington Mutual had lifted investor sentiment.
The International Monetary Fund said turmoil in credit
markets could spread -- with losses possibly approaching $1
trillion -- and cautioned that risks to global economic growth
had increased.
Morgan Stanley <MS.N> Chief Executive John Mack said while
the United States is nearing the end of the subprime mortgage
crisis, markets are the most difficult he has seen in 40 years.
He added that he is concerned about commercial mortgage
securities, European debt markets and mid-size U.S. banks.
The crucial consumer sector, which accounts for more than
two-thirds of the U.S. economy, is showing more evidence of
deterioration. Anxious consumers have scaled back their
spending in response to high fuel costs and a faltering job
market, analysts said.
"Going into this earnings season, the concern is that
consumers are not only tapped out but are depressed," said
William O'Donnell, director of interest rate strategy at UBS
Securities LLC in Stamford, Connecticut.
The Dow Jones industrial average <> was down 37.29
points, or 0.30 percent, at 12,575.14. The Standard & Poor's
500 Index <.SPX> was down 6.21 points, or 0.45 percent, at
1,366.33. The Nasdaq Composite Index <> was down 11.73
points, or 0.50 percent, at 2,353.10.
Shares of WaMu <WM.N>, as the U.S. thrift is known, sank
after it received a $7 billion capital infusion, slashed its
dividend and said it will report a first-quarter loss that is
much larger than Wall Street expected. The stock fell 9.2
percent.
"I think that to absorb dilutive offerings that we're
seeing in the financials and to absorb the earnings misses that
we're seeing tells me we're in a bottoming process here," said
Matt Kaufler, portfolio manager and analyst at Clover Capital
Management in Rochester, New York. "Whether the bottom lasts a
while before we go back up, I don't know."
Advanced Micro Devices <AMD.N>, the second-largest maker
of computer processors, said after Monday's close that it would
cut 10 percent of its work force, or about 1,680 jobs, and gave
a first-quarter revenue estimate below expectations. Its stock
was down 3 percent.
European shares snapped a two-day winning streak to close
lower, pulled down by banks on persistent worries of more
losses related to the credit crisis, and by weakness in
technology shares.
The FTSEurofirst 300 <> index of top European shares
ended unofficially down 1.01 percent at 1,315.95 points.
Banks took most points off the benchmark, with HBOS
<HBOS.L> down 1.9 percent, Natixis <CNAT.PA> falling 2.2
percent, Dexia <DEXI.BR> losing 2.8 percent and Deutsche
Postbank <DPBGn.DE> off 3.7 percent.
AMD's bearish update tumbled German chipmaker Infineon
<IFXGn.DE> 6.7 percent.
The weak housing front also bedeviled both U.S. and
European investors.
British house prices fell in March at their sharpest pace
since the recession of the early 1990s, the country's largest
mortgage lender said.
Pending sales of previously owned U.S. homes fell a
bigger-than-expected 1.9 percent in February to the lowest
level since data began to be compiled in 2001, according to a
report from a real estate trade group.
Asian shares extended losses as banks and other financials
were pressured by nagging worries about further write-downs.
Australia and New Zealand Banking Group Ltd <ANZ.AX> fell in
Sydney and Mizuho Financial Group <8411.T> slipped in Tokyo.
Tokyo's benchmark Nikkei index <> ended down 1.5
percent after hitting a five-week high on Monday.
Some investors held back ahead of economic indicators, such
as Japanese machinery orders <ECONJP>, later this week.
Stocks elsewhere in Asia, as measured by MSCI's index
<.MIAPJ0000PUS> were down 1 percent.
The dollar rose against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> up 0.10 percent
at 72.29.
The euro <EUR=> was up 0.03 percent to $1.5706, and against
the yen, the dollar <JPY=> was up 0.12 percent to 102.54.
Oil prices slipped after a refinery fire in Europe
pressured already tight stocks of refined products and despite
the U.S. government's energy forecaster predicting supplies
would struggle to keep pace with demand.
U.S. light sweet crude oil <CLc1> fell 53 cents, or 0.49
percent, to $108.56 per barrel.
Gold slipped as investors took profits from recent highs,
awaiting central banks' rate announcements later in the week
that could give market direction.
Spot gold prices <XAU=> fell $7.80, or 0.85 percent, to
$912.20.
U.S. Treasury debt prices were slightly higher. The
benchmark 10-year U.S. Treasury note <US10YT=RR> was unchanged,
yielding 3.545 percent, while the 2-year U.S. Treasury note
<US2YT=RR> was up 2/32, its yield at 1.8916 percent. The
30-year U.S. Treasury bond <US30YT=RR> was up 8/32, the yield
at 4.3409 percent.
(Reporting by Cal Mankowski and Lucia Mutikani in New York and
Bate Felix, Ikuko Kao, Atul Prakash and Anna Ringstrom in
London; Editing by Dan Grebler)
