* U.S. consumer prices and confidence drop
* Global shares fall on concerns for global economy
* Government debt gains on safe-haven flows
* Oil and gold prices fall
By Daniel Bases
NEW YORK, July 16 (Reuters) - Global share prices slid on
Friday after disappointing revenue reports from bellwether
U.S. corporations dovetailed with subdued U.S. inflation and
slumping consumer confidence data, driving up the price of
Treasuries as investors sought safety.
The combination of reports undermined the fragile
confidence in the global economy and sent crude oil prices down
for a third straight day.
The dollar fell to a seven-month low against the yen, a
traditional safe-haven investment.
The U.S. Labor Department reported consumer prices fell for
a third straight month in June due to lower energy costs. A
private survey showed U.S. consumer confidence dropped to an
11-month low in July. For details, see []
The euro touched a two-month high above $1.30 on rising
European money market rates, but slipped back as investors bet
the rise was overdone.
General Electric Co <GE.N>, the largest U.S. conglomerate,
and top U.S. financial groups Bank of America Corp <BAC.N> and
Citigroup Inc <C.N> all reported declines in quarterly
revenues from the prior year. The revenues, which investors
viewed as key to providing insight into future performance,
offset the good news of rising profits.
"The most important thing about second-quarter earnings is
guidance, so investors are looking for revenue growth," said
Scott Marcouiller, senior equity market strategist at Wells
Fargo Advisors in St. Louis.
In midday Wall Street trade, The Dow Jones industrial
average <> fell 200.56 points, or 1.94 percent, at
10,158.75. The Standard & Poor's 500 Index <.SPX> lost 24.92
points, or 2.27 percent, at 1,071.56. The Nasdaq Composite
Index <> dropped 55.09 points, or 2.45 percent, at
2,193.99.
GE shares fell 3.6 percent to $14.70; Bank of America lost
7.6 percent to $14.22; Citigroup lost 3.85 percent to $4.00.
The two banks also posted profit declines. []
and []
"We're at a point where the economy is supposed to be
getting stronger, but companies are finding it hard to do
about-faces in their revenue," said Bruce Zaro, chief technical
analyst at Delta Global Advisors in Boston.
European equities fell to a one-week closing low, felled by
weak bank shares. The pan-European FTSEurofirst 300 <>
index of top shares fell 2 percent to 1,012.94 points.
"The central issue is which factors have the stronger
effect on equity markets: the positive reports on earnings or
the burden due to weaker leading indicators? We think that the
negative effects from weaker economic indicators will
dominate," said Tammo Greetfeld, equity strategist at UniCredit
in Munich.
Oil giant BP's New York-listed shares lost ground, falling
3.4 percent to $37.59 while its London-listed shares rose 1.34
percent. The U.S. shares rose 7.6 percent late on Thursday
after news it plugged the oil leak that began in April.
The MSCI world equity index <.MIWD00000PUS> fell 1.72
percent while the Thomson Reuters global stock index
<.TRXFLDGLPU> lost 1.77 percent.
Asian stocks fell, with Japan's Nikkei average <>
dropping nearly 3 percent for its worst one-day percentage loss
in more than a month [].
GREENBACK DOWN
The U.S. dollar, while under selling pressure, did rise
from session lows as investors fled stocks for U.S. Treasuries.
The greenback slid 0.96 percent to 86.61 yen <JPY=>, off an
earlier seven-month low, while the euro lost all its gains to
trade down nearly 0.11 percent at $1.2924. Earlier it had
reached a two-month high of $1.3007 <EUR=>.
Receding concerns about euro-zone sovereign debt problems
have buoyed the euro after smooth absorption of some euro-zone
government bond auctions earlier this week.
Analysts said further weakening in the dollar versus other
major currencies, particularly the euro, could be limited.
"The dollar's adjustment can be justified as the Fed may
have to do more easing, but in the longer term it could start
to benefit from safe-haven flows," said Jane Foley, research
director at Forex.com in London.
"If the Fed isn't going to hike, it's hard to see the ECB
hiking first," she added.
U.S. benchmark Treasuries rallied on the safe-haven
sentiment. The benchmark 10-year Treasury <US10YT=RR> rose
15/32 of a point in price to pull the yield down to 2.94
percent. The two-year Treasury <US2YT=RR> rose 1/32, yielding
0.593 percent after falling to a record low of 0.58 percent on
Thursday.
European government debt rose on the U.S. data. The
September Bund future <FGBLU0> rose to 129.16, up 36 ticks on
the day, compared with 128.80 before the data.
Crude oil <CLc1> fell 83 cents to $75.79 per barrel, and
spot gold prices <XAU=> fell $18.75 to $1,188.80.
(Additional reporting by Ellen Freilich, Nick Olivari, Ryan
Vlastelica in New York; Tamawa Desai, Atul Prakash, Neal
Armstrong in London; Editing by Leslie Adler)
