(Updates with U.S. data, Wall Street outlook)
By Jeremy Gaunt, European Investment Correspondent
LONDON, April 14 (Reuters) - Fallout from poor corporate
results and a series of factors pointing to a U.S. recession hit
global stock markets on Monday while the dollar fell.
Wall Street looked set for a poor start, although better
than expected retail sales for March pared losses in stock index
futures.
European stocks dropped for the fifth session in a row as
weak corporate results continued to spook investors.
Philips Electronics <PHG.AS> reported a 28 percent drop in
core profit, below average analyst expectations, hurt by its
loss-making TV business and acquisition-related charges.
It added to angst from last Friday's weak earnings posted by
U.S. conglomerate General Electric <GE.N> and news of U.S.
consumer sentiment at a 26-year low, which fuelled worries about
the scale of the U.S. economic downturn.
U.S. retail sales, however, unexpectedly rose 0.2 percent in
March, although they were pushed higher by a jump in gasoline
sales.
The FTSEurofirst 300 <> index of top European shares
was down 0.8 percent, bringing this year's losses to more than
15 percent.
Earlier, Japan's Nikkei average index <> closed 3.1
percent lower while shares across the rest of Asia, gauged by
MSCI's regional index <.MSCIAPJ>, fell 2.2 percent.
"Global businesses are going to be nervous that what's
happening in the United States is spilling over elsewhere," said
John Haynes, an investment strategist at Rensburg Sheppard
Investment Management.
"For this quarter people have reasonably decent expectations
of earnings outside the financial sector, and whether or not
they are overoptimistic remains to be seen," he said, adding
that initial signs were not promising.
Finance chiefs from the Group of Seven rich nations grappled
at the weekend with proposals for tightening global scrutiny of
banks and pressed the private sector to step up efforts to
settle the financial turmoil still emanating from the U.S.
mortgage market meltdown.
SWING
The G7 also unexpectedly voiced concern about sharp swings
in major currencies, initially sending the dollar higher. But
gains were capped by the persistent worries about the health of
the U.S. economy.
It was the first time a G7 communique has mentioned major
currencies since 2000. Dealers doubted that central banks would
intervene and trading returned to earlier patterns.
The euro fell as low as $1.5672 <EUR=> in Asian trading
according to Reuters data. But it recovered losses to trade at
$1.5875, up 0.4 percent on the day <EUR=>. It hit a record
$1.5912 last week.
The dollar eased 0.5 percent to 100.48 yen <JPY=>.
Euro zone government bonds were flat after the previous
session's chunky gains as worries about corporate profits
weighed on stocks, underpinning demand for safe-haven government
debt.
The two-year Schatz yield <EU2YT=RR> was flat at to 3.423
percent and the 10-year Bund yield <EU10YT=RR> was at 3.916
percent.
(Additional reporting by Sitaraman Shankar; Editing by Gerrard
Raven)
