* U.S. jobless claims, durable goods prompt recovery fears
* Yen strengthens against dollar, euro on risk aversion
* Stocks fall as U.S. woes pile onto Greek ratings worries
* Oil falls more than 2 percent
(Recasts, updates prices, adds details)
By Luciana Lopez
NEW YORK, Feb 25 (Reuters) - U.S. stocks fell on Thursday
and crude oil prices slid more than 2 percent after weak U.S.
jobless and manufacturing data drove fears that the global
economic recovery is on shaky ground.
The yen gained against both the dollar and the euro as
investors fled to safe-havens, and the euro hit a one-year low
against the yen on growing worries about a sovereign debt
default in the euro zone.
European stocks also sank, falling after two major ratings
agencies suggested they might downgrade the sovereign debt of
debt-laden Greece and then extending losses on the
disappointing U.S. data.
First-time claims for U.S. unemployment benefits rose last
week, defying expectations for a fall, and new orders for
long-lasting U.S. manufactured goods in January also
disappointed investors.
"Our domestic macro numbers speak of lingering weakness
everywhere in the economy," said Peter Kenny, managing director
at Knight Equity Markets in Jersey City, New Jersey. "It's very
difficult to make a compelling argument to buy the market."
U.S. stocks in afternoon trade managed to pare steep losses
that had driven the Dow industrials down by almost 200 points
earlier. The turn in the market, which briefly drove the Nasdaq
into positive territory, came amid rumors of a 4-for-1 planned
stock split by Apple Inc <AAPL.O>. An Apple spokesman said the
company has not announced a stock split.
Some analysts said the broader move was the result of an
oversold market earlier. Still, all three major indexes closed
lower, with industrial and financial shares among the biggest
decliners.
The U.S. government reported that durable goods orders,
excluding transportation, fell 0.6 percent in January.
The Dow Jones industrial average <> ended down 53.13
points, or 0.51 percent, at 10,321.03. The Standard & Poor's
500 Index <.SPX> was down 2.30 points, or 0.21 percent, at
1,102.94. The Nasdaq Composite Index <> was down 1.68
points, or 0.08 percent, at 2,234.22.
Apple was among the Nasdaq's leaders, gaining 0.7 percent
to $202.01.
The pan-European FTSEurofirst 300 index of top European
shares <> finished 1.67 percent lower at 996.73 points,
the lowest close since Feb 15.
Moody's said a change in Greece's rating would depend on
the enactment of fiscal reform plans, and Standard & Poor's
said a downgrade of one or two notches in the next month
remains possible.
World stocks measured in the MSCI All-Country World Index
<.MIWD00000PUS> slid 0.75 percent.
The investor fears boosted the yen <JPY=> as well, with the
dollar down 1.25 percent at 89.07 yen.
The euro <EUR=> reversed earlier losses against the dollar
to gain 0.13 percent to $1.3547, after hitting an almost
nine-month low against the dollar. The euro weakened 1.1
percent to 120.70 yen <EURJPY=>, after falling as low as 119.66
yen, the lowest point since February 2009.
"The yen has strengthened through Asian and European
trading. Sovereign risk fears and the threats of a downgrade of
Greece has definitely had an impact," said Sacha Tihanyi,
currency strategist at Scotia Capital in Toronto.
"The initial jobless claims data has really helped to push
more of a U.S.-centric feeling of risk aversion," he added.
U.S. first-time jobless claims in the latest week rose for
a second straight week
U.S. Treasuries rose on the flight to safer investments.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
14/32, with the yield at 3.6381 percent. The two-year U.S.
Treasury note <US2YT=RR> was up 2/32, with the yield at 0.8276
percent. The 30-year U.S. Treasury bond <US30YT=RR> was up
28/32, with the yield at 4.5806 percent.
Borrowing costs for peripheral euro zone countries rose on
concerns over Greece, with the 10-year Greek/German bond yield
spread widening to as much as 365 basis points from 342 bps on
Wednesday.
The equivalent Spanish spread moved out by as much as 5
basis points to 81 basis points as concerns grew that the
country might become the next in the euro zone to struggle
under the weight of a large budget deficit.
Commodity prices also fell, with oil hit both by fears over
the economy and the rise in the dollar against the yen.
"Economic data is testing the optimism of some investors
who had hoped that rebounding economic growth would push up
demand for commodities," said Carsten Fritsch, analyst at
Commerzbank.
U.S. light sweet crude oil <CLc1> settled down $1.83, or
2.29 percent, to $78.17 per barrel. The Reuters/Jefferies CRB
Index <.CRB> was down 3.87 points, or 1.41 percent, at 270.87.
In Asia, Japan's Nikkei average closed down 1 percent.
(Additional reporting by Wanfeng Zhou, Ellis Mnyandu, Leah
Schnurr and Rodrigo Campos in New York and Atul Prakash and
William James in London; Editing by Leslie Adler)
