* Global stocks slide as fears of worldwide slowdown mount
* Gold, bonds, yen all rise as risk aversion returns
* Oil prices slip to 13-months lows on recession worries
(Recasts with U.S. markets, adds byline; changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Oct 15 (Reuters) - Investors scurried to
safe-havens on Wednesday, with global stock prices falling
sharply, as fear of a deepening worldwide slowdown wiped away
optimism seen earlier this week over governments' bold steps to
avert a financial meltdown.
Gold climbed more than 1 percent, shorter-term euro zone
and U.S. government debt gained and the less-risky yen rallied
after U.S. data pointed to a quickly slowing U.S. economy.
U.S. retailers posted their biggest monthly sales decline
in more than three years in September, the Commerce Department
said. Also, a gauge of manufacturing in New York state tumbled
in October to the lowest since its inception in 2001, the New
York Federal Reserve Bank reported.
"The bottom line is that consumers acted like a deer caught
in the headlights of a fast-moving car," said Fred Dickson,
director of retail research at D.A. Davidson & Co in Lake
Oswego, Oregon.
"They stepped back and dramatically slowed shopping in
September, another indication of how quickly the economy is
slowing."
Stock markets on both sides of the Atlantic declined more
than 3 percent on the growing realization that global growth is
slowing down. Most companies will have to lower their profit
estimates for 2009, said Arthur Hogan, chief market analyst at
Jefferies & Co in Boston.
"People are realizing there are interesting tools being put
in place to deal with the credit crisis, but there's going to
be a lag time to get them to work," Hogan said.
In such a scenario, "the path of least resistance in this
market is down."
At 10:15 a.m., the Dow Jones industrial average <> was
down 281.95 points, or 3.03 percent, at 9,029.04. The Standard
& Poor's 500 Index <.SPX> was down 34.13 points, or 3.42
percent, at 963.88. The Nasdaq Composite Index <> was down
34.22 points, or 1.92 percent, at 1,744.79.
In Europe, the FTSEurofirst 300 index <> of top
European companies was down 4.73 percent at 920.41 points.
Oil prices fell to their lowest in 13 months, dragged down
by expectations that economic weakness will cut further into
demand for crude.
U.S crude <CLc1> was down $3.13 a barrel at $75.51 after
touching a session low of $74.97, its lowest since September
2007. London Brent crude <LCOc1> was $3.08 down at $71.45 a
barrel.
In the Treasury bond market, longer maturity bond prices
turned lower as investors worried anew about the huge slew of
debt issuance that looms to pay for the U.S. government's
efforts to rescue the financial system.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 2/32 in price to yield 4.09 percent. The 2-year U.S.
Treasury note <US2YT=RR> rose 4/32 in price to yield 1.75
percent.
Against the yen, the dollar <JPY=> fell 0.95 percent at
101.21.
The dollar fell against major currencies, with the U.S.
Dollar Index <.DXY> off 0.01 percent at 81.571. The euro <EUR=>
was down 0.19 percent at $1.3596.
Spot gold prices <XAU=> rose $12.55 to $847.80 an ounce.
The gloomy economic news and rise in risk aversion came
despite trillions of dollars pledged worldwide to recapitalize
banks and stem the worst financial crisis since the 1930s.
There were glimpses the concerted government efforts
already were taking effect. The rate banks charge each other
for dollar, euro and sterling loans fell for the second
straight day as recent bold steps from authorities around the
world continued to thaw out frozen money markets.
"Following the release of national 'bailout' plans from UK,
Germany, France, U.S. and others, there are early signs that
the severe money-market tension of the last month may be
easing," said Meyrick Chapman, a strategist at UBS.
"We think the easing will continue," Chapman said.
(Reporting by Ellis Mnyandu, Ellen Freilich, Steven C. Johnson
in New York and Jamie McGeever, Ikuko Kao and Jan Harvey in
London and Tyler Sitte in Frankfurt, Editing by Chizu
Nomiyama)
(Writing by Herbert Lash)
