GLOBAL MARKETS-Treasuries, euro sink on renewed debt fears

                                

                                
 * Euro dips as ECB's Trichet says IMF aid on Greece poor
                                
 * US stocks erase most gains after euro falls on Trichet
                                
 * Stocks rallied earlier on jobs data, profit outlooks
                                
 * Treasuries prices fall after poor sale of 7-year notes
                                
 By Walter Brandimarte
                                
 NEW YORK, March 25 (Reuters) - The euro sank to a 10-month
low on Thursday and benchmark 10-year U.S. Treasury yields hit
a nine-month high, stung by renewed debt fears in Europe and in
the United States.
                                
 The European Central Bank president, Jean-Claude Trichet,
jarred already anxious investors as he criticized a
French-German pact to aid Greece that relies partially on the
International Monetary Fund.
                                
 U.S. equities slid on Trichet's remarks, reversing a rally
that had driven up the three major indexes by more than 1
percent. The Standard & Poor's 500 and the Nasdaq fell into
negative territory, while the Dow industrials barely clung to
gains.
                                
 U.S. Treasuries prices were also hit by a poor sale of
seven-year notes, which underscored investors' concern about an
enormous supply of debt in the United States.
                                
 "We are losing our stock gains because of the threat of
rising U.S. yields and the weakening of the euro," said Tom
Sowanick, chief investment officer of the Omnivest Group in
Princeton, New Jersey.
                                
 The Dow Jones industrial average <.DJI> closed up 5.06
points, or 0.05 percent, to 10,841.21, while the S&P 500 index
<.SPX> fell 1.99 points, or 0.17 percent, to 1,165.73. The
Nasdaq Composite Index <.IXIC> dipped 1.35 points, or 0.06
percent, to 2,397.41.
                                
 Wall Street had notched up strong gains for most of the
session after wireless chip maker Qualcomm and electronics
retailer Best Buy boosted their profit outlooks, increasing
bets that consumer spending will help the economic recovery.
                                
 Shares of Best Buy <BBY.N> ended 3.6 percent higher while
Qualcomm's stock <QCOM.O> rose 5.0 percent. [ID:nN24177911]
[ID:nN25222168]
                                
 The market had also been supported by data showing the
number of U.S. workers filing new applications for unemployment
insurance fell sharply last week. The number of those
continuing to receive benefits after an initial week of aid
fell to the lowest point since December 2008. [ID:nN25214871]
                                
 TRICHET POURS COLD WATER
                                
 News that France and Germany agreed on the terms of a
financial aid plan for Greece just before Thursday's European
Union summit initially boosted markets, sending European shares
to a 18-month closing high and driving the euro higher.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended 1.01 percent higher at 1,083.34 points, the highest close
since early October 2008, before Trichet's comments.
                                
 The euro tumbled, however, after ECB chief Trichet said the
IMF participation on the aid plan for Greece is "very, very
bad" because it means European countries are shying away from
their responsibilities. [ID:nLDE62O2C4]
                                
 The European single currency <EUR=> weakened 0.20 percent
to $1.3286 after EU sources said the IMF would provide
one-third of the money to a possible package for Greece.
[ID:nWEB7466]
                                
 Against the Japanese yen, the dollar <JPY=> was up 0.53
percent at 92.70.
                                
 The sudden rise in the dollar also hit oil prices, with May
crude futures <CLKO> erasing early gains to close down 8 cents,
or 0.1 percent, at $80.53 a barrel.
                                
 TREASURIES FALL AGAIN
                                
 Prices of U.S. Treasuries fell for the third consecutive
session after an auction of $32 billion in seven-year notes
attracted poor investor demand, following the same pattern seen
in the previous two auctions this week.
                                
 "The auction went terribly," said Thomas Simons, money
market economist at Jefferies & Co. "The seven-year note
auction was very sloppy, similar to how the five-year went
yesterday.
                                
 The benchmark 10-year U.S. Treasury note <US10YT=RR> lost
9/32 in price, sending the yield to 3.8835 percent. In intraday
trading, 10-year yields reached a nine month high of 3.93
percent.
                                
 The 30-year U.S. Treasury bond <US30YT=RR> was down 19/32,
with the yield at 4.7647 percent.
                                
 The huge wave of new government debt supply is affecting
the price of Treasuries, while a more-or-less steady stream of
positive data on the U.S. economy adds to expectations of
higher inflation and interest rate increases.
 (Editing by Leslie Adler)