* U.S. shares extend losses after new home sales data
* World stocks fall for 5th straight day
* Yen falls back on intervention talk
By Walden Siew
NEW YORK, Aug 25 (Reuters) - World stocks fell for a fifth
day on Wednesday as worries about a double-dip recession
persisted, while the yen eased from a 15-year high on
speculation that Japan may intervene to weaken its currency.
Data from the United States showed the housing sector
continues to suffer and in Europe, Standard & Poor's sent a
reminder of the problems that euro zone economies face in
managing their debt, cutting Ireland's credit rating.
U.S. stocks lost ground on Wednesday after data showed
single-family home sales fell in July to set their slowest pace
on record, while prices were the lowest in more than 6-1/2
years, implying further loss of momentum in the economic
recovery. For full story see []
The new home sales data follows a report on Tuesday that
showed sales of existing homes dropped by a record rate to a
15-year low.
"There has been nothing good that has come out of housing
over the last several months," said Tom Porcelli, senior
economist at RBC Capital Markets in New York. "We don't expect
that to change anytime soon."
The Dow Jones industrial average <> was down 64.25
points, or 0.64 percent, to 9,976.20. The Standard & Poor's 500
<.SPX> fell 8.31 points, or 0.79 percent, to 1,043.56. The
Nasdaq Composite <> lost 13.16 points, or 0.62 percent, to
2,110.60.
"I don't think housing alone could push us into another
recession because it's not big enough at this point," Porcelli
said. "But the risk of a double-dip recession is meaningfully
high."
World equities measured by the MSCI All-Country World Index
<.MIWD000000PUS> dropped 0.5 percent, down for a fifth straight
session, and the Thomson Reuters euro zone peripheral index
<.TRXFLDPIPU> lost 0.8 percent.
In Europe, S&P's one-notch cut in Ireland's rating
overshadowed a better than expected German business morale
reading for August from the Ifo think tank.
"The Ireland downgrade was not too much of a surprise but
it is still weighing on sentiment," said Joshua Raymond, market
strategist at City Index in London.
In addition to the U.S. housing data, a separate government
report showed new orders for U.S. manufactured goods excluding
transportation equipment posted their largest decline in 1-1/2
years in July, pointing to a slowdown in manufacturing.
The reports were the latest indication of subdued U.S.
economic growth and an increased risk of a slide back into
recession, though most analysts still do not believe a
double-dip recession is imminent.
The view that the economic recovery was fading fast led
investors to pile into U.S. Treasury bonds, seen as a
safe-haven investment in times of economic uncertainty. Slowing
growth also means there will be little inflationary threat to
longer-dated Treasuries. []
YEN SELLING
Japan's Nikkei business daily reported Japan's Ministry of
Finance may intervene on its own to sell yen if speculators
drive up the currency. The dollar has lost nearly 9 percent
against the yen this year.
Finance Minister Yoshihiko Noda reinforced that view,
telling reporters that recent yen moves were one-sided and
Tokyo will respond appropriately when necessary.
Some said it was unlikely the Japanese would intervene at
current levels.
"I think it's unlikely there would be intervention much
above 80 yen," said Ray Farris, chief currency strategist at
Credit Suisse in London. "The yen is not overvalued by our
estimates."
The dollar was up 0.4 percent at 84.56 yen, and up 0.2
percent against a basket of currencies. The yen also fell from
a nine-year peak against the euro.
Tokyo's Nikkei average had lost 1.7 percent to hit a
16-month closing low on disappointment over the lack of policy
action by the authorities to rein in the strong yen, which
threatens Japan's fragile economic recovery.
Illustrating concerns over global growth, miner BHP
Billiton said it was cautious on the short-term outlook and
that the economy in China, its biggest customer, would slow
from recent highs.
The FTSEurofirst 300 index of leading European shares was
down 0.5 percent, having been in positive territory earlier
after the Ifo data, which also boosted the euro.
Crude oil prices edged up from a seven-week low but were
still below $72, with copper 0.2 percent lower.
Gold gained 0.5 percent, and earlier hit an eight-week
high.
(Reporting by Walden Siew in New York; additional reporting
by Kevin Plumberg in Hong Kong, Neal Armstrong, Dominic Lau and
Ian Chua in London, Editing by Chizu Nomiyama)
