* Crude oil at 30-month highs on fear unrest may spread
* Global stocks fall as oil concerns prompt growth worries
* Swiss franc gains against US dollar on safe-haven buying
* Government debt prices jump due to safe-haven status
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Feb 22 (Reuters) - World stocks tumbled on
Tuesday as revolt in Libya drove crude oil prices to 30-month
highs and sparked fears of slower global growth if the unrest
spreads to other oil-exporting countries in the region.
Global stocks, as measured by MSCI's all-country world
index <.MIWD00000PUS>, fell 1.6 percent.
Wall Street stocks suffered their worst day since last
August in what could be the start of a long-anticipated
pullback after gaining more than 20 percent in the past six
months. Heavy volume and rising volatility gave credence to a
significant correction to the uptrend which has seen stocks
double from their March 2009 lows in the past two years.
Crude oil prices surged in London and new York to highest
levels in 2-1/2 years with North Sea Brent <LCOc1> touching$108.57 a barrel before trimming most of those gains after
Saudi Arabia said the Organization of Petroleum Exporting
Countries would meet any supply shortages caused by the Libyan
revolt. For details seen []
"The major underlying fear in the market is that these
protests spread in the region to even larger producers like
Saudi Arabia," said Andy Lebow, a trader at MF Global in New
York. "While that might not look likely right now, even a hint
of real problems there could send prices vertical."
LIBYA OIL SUPPLY THREAT
Libya declared force majeure on all oil product exports as
political violence shut more than 13 percent of the country's
1.6 million barrels per day of crude production.
A defiant Muammar Gaddafi vowed to die "a martyr" in Libya
and said he would crush a revolt which has seen eastern regions
already break free from four decades of his rule.
[]
Libya only ranks third in Africa after Nigeria and Angola
in oil production, but investors are concerned that the spread
of violence in North Africa and the Middle East could disrupt
the supply of regional oil exports.
U.S. crude for March delivery <CLH1>, which expired at the
close, settled up $7.37 at $93.57 a barrel. The day's trading
included business done electronically on Monday, when floor
trade was shut due to the U.S. Presidents Day holiday.
In London, Brent crude oil futures settled up 4 cents at
$105.78 a barrel, its highest close since September 2008.
WALL STREET FEAR GAUGE JUMPS
The CBOE Volatility Index <.VIX>, Wall Street's so-called
fear gauge, surged more than 27 percent in its highest one-day
jump since last May. Volume on the three main stock exchanges
was the highest this month and the second-highest this year.
The Dow Jones industrial average <> closed down 178.46
points, or 1.44 percent, at 12,212.79. The Standard & Poor's
500 Index <.SPX> fell 27.57 points, or 2.05 percent, at
1,315.44. The Nasdaq Composite Index <> dropped 77.53
points, or 2.74 percent, at 2,756.42.
Higher oil prices hit certain stocks on concerns of higher
fuel costs. The Arca airline index <.XAL> fell 5.5 percent.
Stocks resisted further decline for much of the day after
data showing U.S. consumer confidence rose to a three-year high
in February. But a drop in home prices for the sixth month in a
row in December suggested the economy still faces some hurdles.
[]
The Swiss franc, traditionally sought in times of
heightened geopolitical tension, firmly gained against the euro
as concerns about oil supplies cooled risk appetites and sent
investors into safe-haven assets such government debt. The
Swiss currency rallied about 1.0 percent versus both the euro
and U.S. dollar.
The euro <EUR=> was down 0.15 percent at $1.3654, and
against the Japanese yen, the dollar <JPY=> was down 0.43
percent at 82.75.
"Libya is the obvious theme today, so you have a little bit
of safe-haven trading," said Fabian Eliasson, vice president of
currency sales at Mizuho Corporate Bank in New York.
U.S. Treasury debt prices rose, boosted by Libya-sparked
safe-haven buying, and some analysts anticipate further price
gains on expectations that economic growth will wane.
[]
The price of the 30-year U.S. Treasury bond <US30YT=RR>
rose more than a full point and the benchmark 10-year rose a
full point as the unrest in Libya prompted investors to swap
riskier assets for safe-haven bonds. []
The 10-year U.S. Treasury note <US10YT=RR> was up 1-1/32 in
price to yield 3.46 percent, while the 30-year bond last traded
1-14/32 higher in price to yield 4.60 percent.
Spot gold prices edged under $1,400 an ounce, breaking a
six-session rally, as bullion investors took profits and as
sharp losses in equities and other commodities prompted margin
selling. []
U.S. gold futures for April delivery <GCJ1> settled up
$12.50 at $1,401.10 an ounce, in gains that were largely due
from the Presidents Day closing of markets on Monday.
(Additional reporting by Chuck Mikolajczak, Karen Brettell,
Gertrude Chavez-Dreyfuss, and Julie Haviv in New York; Writing
by Herbert Lash, Editing by Andrew Hay and Chizu Nomiyama)
