* Global stocks fall, oil slides again
* US Treasuries mixed after grim housing, GDP data
* Euro zone government bond yields hit record lows
(Updates to close)
By Daniel Bases
NEW YORK, Dec 23 (Reuters) - U.S. and European stock
markets slipped on Tuesday after more dismal economic reports
from the U.K. and U.S. in particular, and bond yields edged
lower.
U.S. existing home sales and prices both fell at a record
pace in November [], while other data confirmed
the U.S. economy shrank by 0.5 percent in the third quarter. In
addition, U.S. consumer spending fell by 3.8 percent, the
biggest drop since 1980. []
The reports emphasized the view that global economic
conditions are worsening, leading to cuts in energy demand and
reductions in holdings of risky assets.
As a result investors bought bonds as they sought the
safety of sovereign debt for peace of mind rather than a return
on their money.
"The only way out to get out of this mess is to see the
housing market improve," said Joe Saluzzi, co-manager of
trading at Themis Trading in Chatham, New Jersey.
U.S. existing home sales plunged a record 8.6 percent in
November and prices fell a record amount as layoffs and a stock
market crash worsened an already grim housing market, the
National Association of Realtors reported.
"The bottom line: Bah humbug. Recession, recession," said
Jennifer Lee, an economist with BMO Capital Markets in
Toronto.
In U.S. stock trading, the Dow Jones industrial average
<> fell 100.28 points, or 1.18 percent, to 8,419.49. The
Standard & Poor's 500 Index <.SPX> lost 8.47 points, or 0.97
percent, to 863.16. The Nasdaq Composite Index <> dropped
10.81 points, or 0.71 percent, to 1,521.54.
Retailers were among the worst hit ahead of the holiday.
A survey released on Tuesday showed just 38.7 percent of
Americans went shopping the final weekend before Christmas
versus 41.6 percent last year, marking the lowest turnout in at
least six years, according to America's Research Group and UBS.
The S&P Retail index <.RLX> fell 1.39 percent. The share
price for Wal-Mart <WMT.N>, the No. 1 global retailer, fell
$0.70 or 1.25 percent to $55.29. Clothing chain Gap Inc <GPS.N>
dropped $0.35 or 2.66 percent to $12.80.
MSCI world equity index <.MIWD00000PUS> fell 1.41 points or
0.64 percent to 220.12.
Third-quarter data showed the UK economy posted the worst
quarterly decline since 1990, shrinking 0.6 percent, while New
Zealand's economy contracted by its biggest amount in eight
years -- a seasonally adjusted drop of 0.4 percent.
Data on Tuesday showed Spain's GDP contracted 1.5 percent
year-on-year between October and December, putting it into
recession for the first time in 15 years.
The FTSEurofirst 300 index of leading European shares
<> closed down 1.43 points or 0.18 percent to 808.35.
In Europe, oil-related share prices and pharmaceutical
companies fell hardest. Total <TOTF.PA>, Royal Dutch Shell
<RDSa.L>, Repsol <REP.MC>, and Statoil <STL.OL> fell between
1.3 and 2 percent.
Drug maker Sanofi-Aventis <SASY.PA> closed 4.3 percent
lower, after a study comparing the French drugmaker's
experimental treatment for abnormal heart rhythms with a
standard treatment showed mixed results.
Japanese markets were closed for a holiday.
BOND YIELDS EDGE LOWER
Two- and 10-year euro zone government bond yields briefly
touched record lows on the back of the weak global economic
data. Light trading volumes exaggerated the price movements.
The two-year euro zone government bond yield fell to fresh
record lows of 1.754 percent <EU2YT=RR>. The 10-year yield also
hit a record low of 2.916 percent <EU10YT=RR>.
There was weak demand for a record $28 billion auction in
five-year U.S. Treasury notes.
"People are balking and demanding higher yields," said
George Goncalves, chief Treasury/TIPS and agency strategist
with Morgan Stanley in New York.
On the longer-end of the yield curve, the 10-year benchmark
U.S. Treasury was unchanged in price, yielding 2.178 percent.
Last week the 10-year yield hit 2.04 percent, the lowest since
the early 1950's <US10YT=RR>.
Year-end demand for the U.S. dollar helped blunt some of
the damage from the weak economic reports. The greenback rose
versus a basket of major trading-partner currencies, with the
U.S. Dollar Index <.DXY> up 0.09 percent at 81.264 from a
previous session close of 81.188.
The euro <EUR=> managed a marginal gain of 0.15 percent at
$1.3963 from a previous session close of 1.3942 while the
dollar traded up 0.82 percent to 90.89 against the yen from a
previous session close of 90.150 <JPY=>.
MSCI's emerging markets stock index <.MSCIEF> fell 11.76
points or 2.07 percent to 555.58.
U.S. crude oil <CLc1> dropped $0.93 or 2.33 percent to
settle at $38.98 a barrel. Spot gold prices fell $9.15 or 1.08
percent to $837.95. Copper hit a four-year low of $1.2810 a lb
on the New York Mercantile Exchange's COMEX division.
(Additional reporting by Natsuko Waki and Rebekah Curtis in
London; John Parry and Steven C. Johnson in New York; and Doug
Palmer and Alister Bull in Washington)
