* Wall Street slips on economic, corporate outlook jitters
* Oil rises above $49 a barrel on weaker dollar support
* Government debt trim losses after Fed details purchases
* Euro rises against dollar after risk aversion eases
(Recasts, updates U.S. markets; changes dateline, previous
LONDON)
By Herbert Lash
NEW YORK, April 23 (Reuters) - U.S. and European stocks
faltered on Thursday as new U.S. housing and labor data
punctured hopes the U.S. economy is improving, driving gold to
a three-week high over $900 an ounce on its safe-haven appeal.
Oil rose above $49 a barrel but pared some gains as a weak
dollar outweighed concerns about falling global demand and
rising inventories in the United States, the world's top energy
consumer.
The euro touched a one-week high versus the dollar as risk
aversion for the European currency eased on brighter signs for
regional economies. The euro zone's services and manufacturing
sectors posted their best performance in six months in April.
For details, see []
Pockets of recovery could bee seen in European banks after
Credit Suisse <CSGN.VX> posted first-quarter results that
doubled expectations and Britain's Barclays Plc <BARC.L> said
it intends to resume dividend payments. []
Several large U.S. regional banks also posted
better-than-expected quarterly results, providing a glimmer of
hope for a sector that has been battered by higher loan losses
in a recessionary economy.
But the number of laid off American workers filing claims
for jobless benefits rose last week and sales of previously
owned homes fell in March, data showed, indicating the
16-month-old U.S. recession was far from over. []
The number of people claiming benefits after drawing an
initial week of aid vaulted in early April to the 14th
consecutive week of record highs, the Labor Department said.
"The data is a bit disappointing for the market," said BNP
Paribas analyst Michael Widmer. "There is still uncertainty.
People are asking themselves at what stage the economy will
bottom out."
At 1 p.m., the Dow Jones industrial average <> was down
15.45 points, or 0.20 percent, at 7,871.12. The Standard &
Poor's 500 Index <.SPX> was off 1.24 points, or 0.15 percent,
at 842.31. The Nasdaq Composite Index <> was down 5.90
points, or 0.36 percent, at 1,640.22.
Investors found some relief as a few companies, including
Apple Inc <AAPL.O>, posted stronger-than-expected results and
the regional U.S. banking results cushioned stock declines.
But worries over what the U.S. government's "stress tests"
on 19 major U.S. banks will reveal kept uncertainty high. The
government is set to unveil the results on May 4.
The pan-European FTSEurofirst 300 <> index of top
shares fell 0.4 percent at 791.95 points.
The euro <EUR=> rose 0.58 percent at $1.3072 after touching
a one-week high of $1.3086, according to Reuters data.
Sterling also recovered against the dollar after a sharp
sell-off on Wednesday following the announcement of the British
budget, which showed a rapid deterioration in public finances.
"The euro is seeing a bit of a respite," said Andy Busch,
chief foreign exchange strategist at BMO Capital in Chicago.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> off 0.61 percent at 85.768.
Against the yen, the dollar <JPY=> fell 0.12 percent at
97.85.
Oil gained slightly on the dollar's weakness. A falling
dollar can boost the appeal of oil and commodities to investors
as an inflation hedge.
"Traders are looking more at exogenous factors, such as
equities, dollar direction and China as a precursor of what
might be on the horizon," said Nauman Barakat, senior vice
president, global energy futures at Macquarie Futures USA.
"The underlying fundamentals, while important, are not the
key drivers for market direction."
U.S. crude <CLc1> was up 41 cents at $49.26 a barrel, after
dropping as much as 48 cents in early Asian trade. London Brent
crude <LCOc1> was up 15 cents to $49.96.
U.S. and euro zone government bonds fell in price.
U.S. debt pared losses after the Federal Reserve announced
details of its latest purchases of Treasuries while concerns
about mounting debt supply to fund various government stimulus
packages hurt European demand for fixed income assets.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
2/32 in price to yield 2.95 percent. The 2-year U.S. Treasury
note <US2YT=RR> was breakeven in price to yield 0.96 percent.
Spot gold prices <XAU=> rose $17.25 to $906.40 an ounce.
Stocks staged a comeback across most of Asia as a
larger-than-expected profit from Korea's Hyundai fed optimism
that the auto sector could be nearing a turnaround.
Japan's Nikkei <> added nearly 1.4 percent, while
MSCI's index <.MIAPJ0000PUS> of Asia Pacific shares excluding
Japan gained 1.3 percent.
(Reporting by Leah Schnurr, Vivianne Rodrigues and Burton
Frierson in New York; Joanne Frearson, Emelia Sithole-Matarise,
Christopher Johnson, Alex Lawler, Rebekah Curtis and Jan Harvey
in London; writing by Herbert Lash)
