(Recasts, updates prices)
NEW YORK, April 14 (Reuters) - Stocks edged down on Monday
and the dollar fell as the U.S. economic outlook remained mired
in gloom and a surprise loss at Wachovia Corp, America's
fourth-largest bank, stoked fears that the global credit crisis
is not over.
Oil prices jumped on an unexpected rise in U.S. gasoline
sales last month. Gold bounced, then gave up gains in reaction
to an earlier drop in the dollar and the rise in crude oil
prices.
Stocks fell in Europe and New York as the Wachovia loss and
disappointing earnings at the Netherlands' Philips Electronics
kept investors cautious about equities.
Economic data on both sides of the Atlantic did little to
brighten the sour mood in the markets or ease apprehension
about the outlook for the U.S. and British economies.
U.S. retail sales rose an unexpected 2 percent in March,
spurred by record high gasoline costs. Excluding gasoline,
retail sales were flat, the U.S. Commerce Department reported.
British manufacturers raised prices in March at the fastest
rate since 1991 after the highest increase in costs since
records began being kept more than two decades ago, raising the
risk of a sharp consumer price spike.
The weak results from Wachovia Corp <WB.N> -- the No. 4
U.S. bank -- and European newspaper reports of further
write-downs at Credit Suisse revived worries about the extent
of the global credit crisis.
Wachovia reported an upsurge in credit problems stemming
from mortgages and other debt, triggering a fresh wave of
fixed-income buying among investors already rattled by General
Electric Co's <GE.N> disappointing results on Friday.
"This is just one more in a growing list of financial
services companies that are struggling to keep the ship
upright," said Kevin Giddis, managing director of fixed-income
trading at Morgan Keegan in Memphis, Tennessee.
Shares in Wachovia fell 9 percent, and the Standard &
Poor's financial sector index <.GSPF> closed down about 2.4
percent, according to preliminary figures.
"I don't think anyone's shocked Wachovia is having to
grapple with this," said Peter Kenny, managing director at the
Knight Equity Markets brokerage in Jersey City, New Jersey. "GE
was a bigger drag (on the market) because it speaks to a much
larger, global footprint."
Trading on Wall Street was choppy. The Dow Jones industrial
average <> ended down 16.93 points, or 0.14 percent, at
12,308.49. The Standard & Poor's 500 Index <.SPX> closed down
3.94 points, or 0.30 percent, at 1,328.89. The Nasdaq Composite
Index <> finished down 14.42 points, or 0.63 percent, at
2,275.82.
European stocks fell for the fifth session in a row, led by
Credit Suisse <CSGN.VX> after newspaper reports of further
write-downs at the Swiss bank and on Philips Electronics'
<PHG.AS> disappointing first-quarter earnings.
The FTSEurofirst 300 <> index of leading European
shares closed 0.76 percent lower at 1,275 points. The index is
down about 15 percent for the year.
Credit Suisse shares lost 3.3 percent after weekend news
reports said it could announce further write-downs of up to 5
billion Swiss francs ($5 billion) when it posts first-quarter
results later this month. The bank declined to comment on the
reports.
Shares in Philips, whose core profit fell 28 percent,
dropped 3.3 percent to their lowest close since mid-July 2006.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 10/32 in price, with the yield at 3.5128 percent. The
2-year U.S. Treasury note <US2YT=RR> was down 1/32, with the
yield at 1.7621 percent. The 30-year U.S. Treasury bond
<US30YT=RR> was down 25/32, with the yield at 4.3493 percent.
Euro zone government bond prices edged lower. Traders said
investors appeared to be holding cash rather than adding to
bond portfolios as European bourses and Wall Street endured
selling.
Asian shares, reacting for the first time to last week's
news, lurched lower as the nasty earnings surprise from GE and
a 26-year low in U.S. consumer sentiment reported on Friday
outweighed the Group of Seven nation's support for the dollar
in a weekend meeting.
Japan's Nikkei average index <> fell 3.1 percent while
shares across the rest of Asia, measured by MSCI's index
<.MIAPJ0000PUS>, slid 2.3 percent.
The dollar was little changed as the New York close
approached, surrendering earlier gains.
"The dollar remains under pressure with an overnight
decline in equities reflecting heightened risk aversion," said
Michael Woolfolk, senior currency strategist, at Bank of New
York Mellon.
The dollar was down against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
down 0.1 percent at 71.808 from a previous session close of
72.277. The euro <EUR=> rose 0.1 percent to 1.5816.
Oil prices jumped on an unexpected rise in U.S. gasoline
sales in March, which also pushed the country's overall retail
sales higher for the month. A brief U.S. pipeline shutdown and
some production losses in Nigeria also helped bolster crude
prices.
U.S. light sweet crude oil <CLc1> rose $1.72, or 1.56
percent, to $111.86 per barrel.
Gold buying gathered pace after the dollar turned negative
against the euro and oil prices jumped but failed to maintain
gains.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Spot gold prices <XAU=> fell $1.80, or 0.19 percent, to
$923.10.
(Reporting by Herbert Lash, Nick Olivari, Richard Leong, Peter
Starck, and Gertrude Chavez-Dreyfuss in New York and Ikuko Kao
and Alastair Sharp in London; Editing by Jonathan Oatis)
