* U.S. dollar on track to snap five-week losing streak
* Wall Street zigzags, European shares edge lower
* Crude oil edges up on strong German sentiment data
* U.S. Treasuries edge lower
(Updates with close of European markets)
By Herbert Lash
NEW YORK, Oct 22 (Reuters) - World stocks and the U.S.
dollar see-sawed on Friday before a meeting of the Group of 20
leading economies that kept markets choppy and traders skittish
as they took profits after this week's advance.
Uncertainty about the outcome of the meeting of G20 finance
ministers, who are seeking a common path to manage global
trade, prompted some investors to moderate their dollar-selling
until the gathering in South Korea ends this weekend.
On Wall Street, the S&P 500 and the Nasdaq rose while the
Dow edged lower. But European shares closed slightly off
six-month highs touched in the previous session as the dollar
gained a bit and was on track to snap a five-week losing streak
against major currencies.
The United States struggled on Friday to win backing for a
proposal to set limits on external imbalances as a way of
pressing countries with surpluses such as China to let their
exchange rates rise. For details see: []
U.S. Treasury Secretary Timothy Geithner proposed limiting
surpluses and deficits on the current account -- the broadest
measure of trade in goods and services -- to 4 percent of gross
domestic product, according to Japan's finance minister.
But the plan met with a cool reception, and big exporting
countries that habitually run chunky trade surpluses led the
opposition.
Many emerging market policy-makers blame lax U.S. policies
for the global financial crisis, and they fear Washington is
prepared to debase the dollar by flooding the banking system
with cash to try to breathe life into a sluggish U.S. economy.
"It's unlikely the G20 meeting will produce any substantial
clarity regarding the direction of currencies. It will not
prevent the U.S. Federal Reserve from announcing a new round of
quantitative easing," said UniCredit analyst Tammo Greetfeld.
Traders said large bets against the U.S. currency pointed
to a correction. But they noted they would not rule out another
lurch lower for the dollar, which has fallen about 7 percent
against currencies over the past month.
The dollar rose slightly against major currencies, with the
U.S. Dollar Index <.DXY> up 0.11 percent at 77.501 and is up
about 0.4 percent this week, its first weekly gain since
mid-September.
The euro <EUR=> was barely changed against the dollar at
$1.3922, and against the Japanese yen, the dollar <JPY=> was up
0.14 percent at 81.45.
"The dollar has fallen quite rapidly over the last month or
so and positions are somewhat extended. We saw the tide turning
a bit this week," said Nick Bennenbroek, currency strategist at
Wells Fargo in New York.
BAIDU JUMPS, L'OREAL LAGS
On Wall Street, technology shares edged higher as results
from Baidu Inc <BIDU.O> and SanDisk <SNDK.O> bolstered the
sector's outlook, while the broader market was little changed.
[]
At 1 p.m., the Dow Jones industrial average <> slipped
21.76 points, or 0.20 percent, to 11,124.81. But the Standard &
Poor's 500 Index <.SPX> gained 1.19 points, or 0.10 percent, to
1,181.45. And the Nasdaq Composite Index <> rose 15.61
points, or 0.63 percent, to 2,475.28.
European shares closed down, with the FTSEurofirst 300
<> index of top European shares falling 0.35 percent to
end at 1,089.45 points.
Consumer-related stocks, which had surged earlier in the
week, were among the biggest losers. LVMH <LVMH.PA> lost 0.8
percent and L'Oreal <OREP.PA> surrendered 1.9 percent.
"Earnings have been pretty good and a lot of stocks rose
this week on the back of this, so people are using the excuse
of currency tensions with the G20 meeting to cash in profits,"
said David Thebault, head of quantitative sales trading, at
Global Equities, in Paris.
The MSCI all-country world index of stocks <.MIWD00000PUS>
slipped 0.25 percent at midday in New York.
Japan's Nikkei share average rose 0.54 percent to close at
9,426.71 in thin trade <>, while the MSCI Asia Pacific
ex-Japan index edged up 0.09 percent<.MIAPJ0000PUS>.
OIL GAINS, BONDS AND GOLD DIP
Oil received a lift on news that German business sentiment
reached its strongest in 3-1/2 years in October, according to
the Munich-based Ifo think tank's business climate index, which
indicates growth levels six months ahead. []
U.S. crude futures <CLc1> gained 59 cents, or 0.7 percent,
to $81.15 a barrel. ICE Brent <LC0c1> in London rose 78 cents
to $82.61 a barrel.
U.S. government debt prices fell. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 5/32 in price to yield 2.57 percent.
Gold prices steadied, paring most losses that took them to
2-1/2 week lows earlier in the session.
Spot gold prices <XAU=> fell 10 cents to $1,323.50 an ounce
at 12:53 p.m. versus $1,323.60 late in New York on Thursday.
Gold investors were wary whether any clear agreement to
tackle currency imbalances would be reached at the G20 meeting.
[]
(Reporting by Rodrigo Campos, Steven C. Johnson and Richard
Leong in New York and Kirsten Donovan, Atul Prakash, Emma Farge
and Jan Harvey in London, Blaise Robinson in Paris; Writing by
Herbert Lash; Editing by Jan Paschal)
