* Global stocks slide as U.S. housing data disappoint
* Dollar recovers from 14-month low vs euro
* Bond prices gain on weak housing, producer price data
* Crude oil retreats from more than $80 a barrel
(Updates with U.S. markets, changes byline, dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Oct 20 (Reuters) - Global shares slid and oil
retreated from a year-high above $80 a barrel on Tuesday after
poor U.S. housing data and a drop in producer prices suggested
an anemic economic recovery.
Weaker-than-expected September housing starts in the United
States led euro zone and U.S government bond prices higher as
investors expected the low-inflation environment to allow the
Federal Reserve to hold interest rates at ultra-low levels. For
details, see: [][]
Gold softened in Europe, falling below $1,060 an ounce, as
the U.S. dollar rebounded from its weakest level in 14 months
versus the euro, clipping its appeal as an alternative asset.
[]
Options-related buying kept the dollar from pushing through
$1.50 per euro and 90 yen [], while a reassessment
of supply and demand, coupled with sliding U.S. stocks,
tempered the rally in crude oil. []
In early afternoon trading, U.S. stocks extended losses,
with the S&P 500 and Nasdaq indexes falling 1 percent, as
disappointing housing data and falling commodity prices hurt
materials and energy shares.
MSCI's all-country world index <.MIWD00000PUS> slipped 0.7
percent.
"Everything that derails the view that the worst is behind
us and that the economy will grow strongly in 2010 can hurt the
market. Today we saw that the U.S. housing data was not that
fantastic," said Philippe Gijsels, senior strategist at Fortis
BNP in Brussels.
Shortly after 1 p.m., the Dow Jones industrial average
<> was down 72.93 points, or 0.72 percent, at 10,019.26.
The Standard & Poor's 500 Index <.SPX> was off 8.79 points, or
0.80 percent, at 1,089.12. The Nasdaq Composite Index <>
was 19.57 points lower, or 0.90 percent, at 2,156.75.
A sharp decline in Barclays <BARC.L> on a 1.4 billion pound
($2.3 billion) stake sale by Qatar pulled down financial shares
in Europe, which earlier had climbed to a new one-year high.
[]
The FTSEurofirst 300 <> index of top European shares
closed 0.5 percent lower at 1,021.29 points after hitting 1,031
-- a 12-month high for a fourth straight session.
Strong quarterly results from U.S. bellwether Caterpillar
Inc <CAT.N>, among others, gave stocks a boost.
But concern about U.S. currency weakness prompted the Bank
of Canada to leave interest rates at record lows, driving the
U.S. dollar nearly 2 percent higher against the Canadian
dollar.
Tame U.S. inflation data offset strong quarterly earnings
from Apple <AAPL.O> on Monday evening, denting investor
sentiment to sell the low-yielding dollar for higher-yielding
currencies more closely correlated with economic recovery.
"If earnings continue to outperform, it's only a matter of
time before we go higher," said Jacob Oubina, strategist at
Forex.com in Bedminster, New Jersey, who said he expects the
euro to clear the $1.50 barrier soon.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.13 percent at 75.611.
The euro <EUR=> was down 0.31 percent at $1.4916. Against
the yen, the dollar <JPY=> was up 0.28 percent at 90.83.
Weakness in stocks bolstered the safe-haven appeal of
government debt.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
11/32, with the yield at 3.3463 percent.
U.S. light sweet crude oil <CLc1> fell 90 cents to $78.71 a
barrel.
Spot gold prices <XAU=> fell $5.40 to $1,057.30.
Copper rose to its best level in over a year.
[]
The benchmark MSCI index of Asia-Pacific shares outside
Japan <.MIAPJ0000PUS> rose 0.9 percent to a fresh 14-month
high, led by materials and financial sectors. Technology shares
pushed Japan's Nikkei share average <> up 0.9 percent.
(Reporting Ryan Vlastelica, Steven C. Johnson, Chris Reese in
New York; Ian Chua, Atul Prakash, Emma Farge and Jan Harvey in
London; writing by Herbert Lash)
(Editing by Andrew Hay)
