* U.S. shares fall after new home sales
* World stocks decline for 5th straight day
* Yen falls back on intervention talk
By Walden Siew
NEW YORK, Aug 25 (Reuters) - World stocks fell for a fifth
straight day on Wednesday as a new batch of disappointing U.S.
economic data fed growing worries of a double-dip recession,
while the yen eased from a 15-year high on speculation that
Japan may intervene to stem the currency's rise.
Sales of new U.S. single-family homes fell in July to their
lowest level in 47 years, and orders of long-lasting
manufacturing goods posted their biggest decline in July in
1-1/2 years, the government reported.
In Europe, Standard & Poor's cut Ireland's credit rating,
sending a sharp reminder that euro zone economies still face
problems managing their debt.
Gold rose to an eight-week high and U.S. Treasuries prices
rose as investors turned to traditional safe havens.
Longer-dated Treasuries drew strong bids, driving the
30-year bond up more than a point at the day's high. The spread
between between two-year and 10-year Treasuries dropped below
200 basis points for the first time since April 2009.
Slowing economic growth means there will be little
inflationary threat to longer-dated Treasuries, which investors
increasingly see as a good place to store cash as the
deteriorating economy eliminates investment opportunities
elsewhere.
U.S. stocks fell and European declined to a five-week
closing low after the Commerce Department reported that sales
of U.S. new single-family homes were at the lowest since
records began in 1963. And prices fell to the lowest level in
more than 6-1/2 years, implying further loss of momentum in the
economic recovery. For full story, see []
The data on new-home sales comes a day after a report that
showed sales of existing homes dropped by a record rate to a
15-year low.
"There is a big focus on economic data now that we've come
through the earnings season. People are expecting very slow
growth at the minimum but there is still a potential for a
double dip and investors are looking towards economic data to
help paint the picture for the potential for that," said Joshua
Raymond, market strategist at City Index in London.
The Dow Jones industrial average <> dipped 44.04
points, or 0.44 percent, to 9,996.41. The Standard & Poor's 500
Index <.SPX> dropped 5.52 points, or 0.52 percent, to 1,046.35.
The Nasdaq Composite Index <> fell 4.23 points, or 0.20
percent, to 2,119.53.
A rebound off an S&P 500 index technical support level, on
hand with extended market weakness after five days of broad,
market declines helped buffer losses.
Energy shares led losses on the S&P 500 as coal miners
stocks dropped on concerns that power plants would switch to
natural gas from coal as the price of gas fell to a three-month
low. For details see [].
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 Raymond at City
Index.
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.8 percent lower at 1,011.35 points after being
as low as 1,001.83 earlier.
Miners were among the biggest fallers. BHP Billiton <BLT.L>
fell 2 percent after it said it was cautious on the short-term
outlook and that the economy in China, its biggest customer,
would slow from recent highs.
Shares of Allied Irish Banks <ALBK.I> fell 2.9 percent,
following the S&P ratings downgrade on Ireland. S&P cited high
costs faced by the government to support ailing financial
institutions..
YEN SELLING
In currency markets, the yen pulled back from 15-year highs
against the U.S. dollar and a nine-year peak versus the euro on
Wednesday.
Japan's Nikkei business daily reported that 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.
The strong yen threatens Japan's fragile economic
recovery.
Finance Minister Yoshihiko Noda reinforced that view,
telling reporters that recent yen moves were one-sided and
Tokyo will respond appropriately when necessary.
"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 <JPY=>, and up
0.2 percent against a basket of currencies.
The euro was supported by strong German economic data.
Tokyo's Nikkei average 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.
In the U.S. Treasuries market, the benchmark 10-year yield
<US10YT=RR> fell as far as 2.42 percent, the lowest since late
January 2009.
Later, the market pulled back from its biggest gains as
traders prepared for a $36 billion auction of five-year notes
at 1 p.m. (1700 GMT).
The 10-year note was last up 9/32 in price, yielding 2.45
percent.
Also, the poor economic outlook prompted the Federal
Reserve to begin buying Treasuries again recently, underpinning
government bonds with a guaranteed inflow of official cash, at
least as long as the data continues in the weak vein of the
durables report.
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.
(Additional reporting by Kevin Plumberg in Hong Kong, Neal
Armstrong, Dominic Lau and Ian Chua in London, Editing by xxx)
