* World stocks little changed, confidence still lacking
* Investors shed risk ahead of US, UK long weekends
* Unmoved by signs of impasse over Spain labor reforms
(Updates to U.S. markets, changes byline, dateline, previous
LONDON)
By Albert H. Yoon
NEW YORK, May 28 (Reuters) - World equities teetered and
the euro resumed its decline on Friday as lackluster U.S.
economic data and concern over further fallout from the euro
zone's debt crisis led investors to temper bets.
The mixed U.S. reports failed to inspire traders who were
shielding themselves ahead of long holiday weekends in London
and New York. U.S. indexes were nearly 1 percent lower.
Fears persisted over contagion from debt-laden Greece after
a bounce in global equities earlier this week. Despite the lack
of major shocks from Spain, Portugal or Ireland, which all have
heavy debt loads, investors were loathe to add risky assets due
to questions over global recovery forecasts.
"The market will inevitably look at the (U.S.) data with
some wariness as a possible early signal that recent market
volatility is starting to feed back into the real economy,"
said Alan Ruskin, head of current strategy at RBS in Stamford,
Connecticut. "For today, it will simply further introduce a
note of caution into the risk trade."
The euro <EUR=> fell 0.13 percent to $1.2352 Friday, is
down 7 percent for the month and on course for its sixth
consecutive monthly loss.
The euro decline came amid signs that talks between Spanish
unions and business to overhaul rigid labor laws were going
badly, casting doubts about the country's long-term solvency.
Lorenzo Bini Smaghi, a top European Central Bank official,
said the euro zone's problems were an early warning to the rest
of the world.
The dollar rose against a basket of major trading-partner
currencies, with the U.S. dollar index <.DXY> up 0.4 percent at
86.498 from a previous session close of 86.185. But the dollar
<JPY=> edged lower by 0.03 percent to 91.03 yen.
European stocks pared gains as U.S. markets dropped 1
percent after a report showed consumer spending in April failed
to rise for the first month since September.
The Thomson Reuters/University of Michigan consumer
confidence index edged higher in April, while the Institute for
Supply Management-Chicago's business barometer dropped in May
from a five-year high in April, signaling inventory restocking
that has driven U.S. growth in recent quarters may be slowing.
For details, see []
The Dow Jones industrial average <> dropped 69.61
points, or 0.68 percent, to 10,189.38. The Standard & Poor's
500 Index <.SPX> fell 8.82 points, or 0.80 percent, to
1,094.24. The Nasdaq Composite Index <> lost 19.73 points,
or 0.87 percent, to 2,257.95.
Global equities measured by the MSCI All-Country World
Index <.MIWD00000PUS> were little changed, coming off a
one-week high. Still, the index is down about 9 percent in May
and on track for its worst monthly loss since February 2009.
Europe's FTSEurofirst 300 <> index fell 0.4 percent,
while Tokyo's Nikkei average <> closed up 1.3 percent in
its best one-day performance in two weeks as exporter shares
climbed on a halt in the yen's advance.
"This recovery rally could soon hit resistance on the
upside. This week's low point wasn't the capitulation point, so
the risk is still on the downside," said Alexandre Le Drogoff,
technical analyst at Aurel BGC.
Yields on benchmark 10-year Bunds <EU10YT=RR> and 10-year
U.S. Treasuries <US10YT=RR> fell by 0.02 percentage points to
2.70 percent and 3.34 percent, respectively.
In energy and commodities, U.S. light sweet crude oil
<CLc1> fell 38 cents, or 0.3 percent to $74.25 per barrel, and
spot gold <XAU=> fell $3.20, or 0.26 percent, to $1207.90.
(Additional reporting by Vivianne Rodrigues and Nick Olivari
in New York, and Dominic Lau, Jessica Mortimer, Blaise Robinson
and George Matlock in London; editing by Jeffrey Benkoe)
