* Global shares slip on doubts about economic recovery
* Euro slips vs dollar, yen as risk aversion rises
* Crude oil slides amid fears over economic outlook
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Aug 17 (Reuters) - Oil slid and global stocks
fell sharply on Monday after weak Japanese data and last week's
poor U.S. consumer confidence data sparked doubts about a U.S.
recovery and prompted investors to cut their exposure to risk.
Asian, European and U.S. stock markets fell to lows last
seen in July as equities tumbled 2.0 percent or more around the
world, and Wall Street suffered its worst loss in 7 weeks.
The Dow, S&P 500 and Nasdaq stock gauges posted their
biggest single-day percentage declines since at least July 2.
In a sign that investors expect more stock volatility in
the near term, the CBOE Volatility Index <.VIX>, considered
Wall Street's fear gauge, jumped almost 15 percent, its biggest
one-day percentage gain since April 20.
Oil slid to its lowest this month while gold dropped below
$936 an ounce as the U.S. dollar rose against the euro, and
copper prices eased as investors expressed caution about the
demand outlook against a weak economic backdrop.
A weaker-than-expected report from the Reuters/University
of Michigan Survey of Consumers ignited cross-market selling
late on Friday. For more see [].
Data showing Japan's economy grew between April and June
for the first time in five quarters was largely ignored, and a
surge in New York state factory activity failed to impress.
"People have started to feel that the market rally moved
well ahead of the actual economic improvement," said Vassili
Serebriakov, currency strategist at Wells Fargo in New York.
The euro hit a two-week low against the dollar and neared a
one-month trough against the yen, while U.S. and European
government debt prices rose on a flight-to-safety bid.
In Europe, the heavyweight banking sector took the most
points off the FTSEurofirst 300 <> index of top regional
shares. The index fell 2 percent to 921.96, its lowest close
since July 29.
"The market is too far ahead of the economy," said
Giuseppe-Guido Amato, strategist at Lang & Schwarz. "We are not
there (in recovery) yet. We have stopped the patient bleeding,
but the cancer is still there."
The sell-off in Asia was broad-based with financials,
industrials and materials providing the biggest drag on the
MSCI index of Asia Pacific shares traded outside Japan
<.MIAPJ0000PUS>. The index fell 3.7 percent to its lowest since
late July.
U.S. stocks fell after Lowe's Cos <LOW.N>, the No. 2 U.S.
home improvement chain, curbed its expansion plans and forecast
worse-than-expected results in the third quarter as consumers
put off major expenditures. Its stock fell 10.3 percent.
Other corporate news reinforced the belief that consumers,
the cornerstone of the U.S. economy, are still in poor shape.
Bank of America Corp <BAC.N>, the largest U.S. bank, and
Capital One Financial <COF.N> reported credit card defaults
rose in July.
"The rebound in the S&P has been its fastest in the
post-war (period), and so people are getting nervous that
things have come too far, too fast," said Rob Minikin, senior
currency strategist at Standard Chartered in London.
The Dow Jones industrial average <> dropped 186.06
points, or 2 percent, to end at 9,135.34. The Standard & Poor's
500 Index <.SPX> was down 24.36 points, or 2.43 percent, at
979.73. The Nasdaq Composite Index <> was down 54.68
points, or 2.75 percent, at 1,930.84.
The benchmark 10-year note <US10YT=RR> rose 25/32 in price
to yield 3.48 percent.
The euro was down about 0.9 percent at $1.4079 <EUR=>, just
above a two-week low. The dollar fell 0.5 percent to 94.45 yen
<JPY=>.
U.S. crude oil futures <CLc1> for September settled down
76 cents at $66.75 a barrel after falling to $65.23, the lowest
since July 31. Brent crude <LCOc1> for October settled down 90
cents at $70.54.
(Reporting by Caroline Valetkevitch, Vivianne Rodrigues and
Chris Reese in New York and Brian Gorman, Alex Lawler, Emelia
Sithole-Matarise, Atul Prakash and Tricia Wright in London;
Writing by Herbert Lash; Editing by James Dalgleish)
