* MSCI world equity index down 0.08 percent at 343.48
* S&P warnings, earnings disappointment weigh
* Oil resumes rise from last week's seven-week low
By Natsuko Waki
LONDON, July 28 (Reuters) -European stocks slipped and Wall
Street was set for a weaker open on Monday as some disappointing
earnings in Europe and a survey showing weak German consumer
morale followed a ratings warning on top U.S. mortgage lenders.
Oil prices rose more than 1 percent towards $125 a barrel,
weighing on investor sentiment, having fallen more than $20 last
week from July's record high. The dollar slipped from one-month
highs above 108 yen <JPY=> while it also fell against a basket
of major currencies <.DXY>.
News that U.S. Congress passed a rescue package that
includes a $300 billion fund to help troubled homeowners gave no
lasting support for risky assets as Standard & Poor's said it
may cut ratings on Fannie Mae <FNM.N> and Freddie Mac <FRE.N>.
The warnings on their preferred shares and subordinated
bonds of the two mortgage giants followed a move by U.S.
regulators to seize two regional banks [] on
Friday. They represented the sixth and seventh bank failures
this year as financial firms struggle with the deepest housing
slump since the Great Depression.
In Europe, firms such as Ryanair <RYA.I> and TNT <TNT.AS>
reported a fall in quarterly profits, while HBOS <HBOS.L> fell
after weekend reports that the bank is due to report more
writedowns at its results on Thursday.
"After several (profit) warnings, investors will be cautious
and concerned about seeing further warnings," said Stefan de
Schutter, asset manager at Alpha Trading in Frankfurt.
The FTSEurofirst 300 index <> fell 0.7 percent while
the MSCI main world equity index <.MIWD00000PUS> was slightly
weaker on the day, after a rally from July's 21-month low
fizzled out last week.
U.S. stock futures were down around 0.2 percent <SPc1>,
indicating a weaker open on Wall Street which kicks off a busy
earnings week. By end-July 70 percent of the companies in the
Dow Jones Industrial Average and S&P 500 Index will have
reported earnings for the quarter.
According to data from Thomson Reuters, the blended earnings
growth rate -- which combines actual numbers for companies that
have reported and estimates for companies yet to report --
stands at -17.9 percent for the second quarter. This compares
with the rate of 4.7 percent at the start of the year.
If the final growth rate for Q2 2008 is -17.9 percent, it
will mark the first time the S&P 500 has recorded four
consecutive quarters of negative growth since Q2 2001 - Q1 2002.
DATA DELUGE
With plenty of negative corporate news, data and surveys
offer mixed readings on the global economy.
The GfK market research group said German consumers have
become more downbeat than at any time since the recession year
of 2003 due to growing concerns about inflation and financial
market turmoil.
On Friday, U.S. data painted a less gloomy picture. U.S.
consumer sentiment crept higher in July from a 28-year low and
business investment rose unexpectedly in June. The
closely-watched U.S. jobs report is due later in the week.
"We have an absolute deluge of data this week... The focus
will be on how the data combines with oil prices and the equity
market," said Marc Oswald, strategist at Monument Securities.
"The question will be at what point stronger data (will
foster) the perception that the U.S. economy is doing better
than it has been."
Emerging sovereign spreads <11EMJ> widened 4 basis points
while emerging stocks <.MSCIEF> were down 0.2 percent.
The September Bund future <FGBLU8> rose 14 ticks, drawing in
safe-haven demand as stocks weakened.
U.S. light crude <CLc1> rose 0.6 percent to $124.76 a barrel
after falling more than $20 last week from its record high.
Gold <XAU=> rose to $928.55 an ounce.
(Additional reporting by Peter Starck and Naomi Tajitsu;
Editing by Victoria Main)
