GLOBAL MARKETS-U.S. stocks, euro slip despite upbeat data

                                
 * Euro skids to 3-week low of $1.2750
                                
 * German Q2 GDP beats estimates, rises 2.2 percent
                                
 * U.S. stocks mostly lower, Treasury yields fall
 (Updates with midday U.S. markets, adds comment)
                                
 By Daniel Bases
                                
 NEW YORK, Aug 13 (Reuters) - Investor euphoria over
Germany's robust economic growth and rising U.S. consumer
sentiment reports proved fickle on Friday as the euro fell to a
three-week low versus the dollar and U.S. stocks weakened.
                                
 A slight rise in U.S. consumer confidence for early August,
plus a small advance in retail sales and an increase in
business inventories were not enough to sustain confidence in
the U.S. economy. For more, see: [ID:nN13180040]
                                
 "Consumer sentiment drifted a bit higher here, but the
market is still convinced that there is a risk of a further
economic slowdown. It suggests that the number may stay
sluggish for the important back-to-school month, further giving
a reason for the bears to push the market lower," said Jeff
Kleintop, chief market strategist at LPL Financial in Boston.
                                
 Germany's 2.2 percent second-quarter growth -- dwarfing
forecasts of a 1.3 percent rise and marking the best quarter
since before reunification -- sparked fears a peak in a
lackluster economic rebound has been reached. [ID:nLDE67C0YX]
                                
 French GDP growth also exceeded forecasts.[ID:nLDE67C0DK]
                                
 Tuesday's U.S. Federal Reserve decision to address a
slowdown in the U.S. economic recovery by buying more
Treasuries fueled doubts about the economic recovery and led to
a sharp sell-off in stocks. [nFEDAHEAD].
                                
 Crude oil prices slipped while gold rose, although it was
down from a one-month high reached earlier in the session.
                                
 A disappointing auction of Italian government bonds
undermined peripheral euro zone debt prices, driving investors
into benchmark German Bunds. [GVD/EUR]
                                
 In midday New York trade, U.S. stocks traded mostly lower
in narrow ranges. The Standard & Poor's 500 Index <.SPX>
slipped 0.65 points, or 0.06 percent, to 1,082.96. The Nasdaq
Composite Index <.IXIC> fell 6.91 points, or 0.32 percent, to
2,183.36. The Dow Jones industrial average <.DJI> edged up 8.33
points, or 0.08 percent, to 10,328.28.
                                
 Pressuring the Nasdaq, Google Inc <GOOG.O> was down 1
percent at $486.82, and Research in Motion Ltd <RIMM.O>
<RIM.TO> dropped 1.3 percent to $53.40.
                                
 India may shut down Google's messaging services over
security concerns, the Financial Times reported, and the
government has threatened a similar crackdown on RIM's
BlackBerry services. [ID:nSGE67C00W]
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares rose 0.28 percent to 1,045.65.
                                
 However, Delhaize <DELB.BR> plunged more than 11 percent
after the Belgian supermarket group cut its 2010 outlook.
[ID:nLDE67A0YB]
                                
 "(European) volumes are pitiful," said Andy Lynch, fund
manager at Schroders. "Price discovery is pretty limited. The
next movement is probably down. The American recovery is still
in doubt ... It's all rather depressing."
                                
 Both the MSCI world equity index <.MIWD00000PUS> and
Thomson Reuters global stock index <.TRXFLDGLPU> made marginal
advances.
                                
 EURO STUMBLES
                                
 The euro fell to a three-week low against the U.S. dollar,
retreating from the highs fueled by Germany's upside economic
surprise.
                                
 The euro dropped as low as $1.2750 <EUR=>, its weakest
level since July 22, according to Reuters data.
                                
 "Subtle fears that the problems in Europe have not
evaporated were highlighted well this week by the focus on the
weaker-than-expected Italian bond auction," said Camilla
Sutton, chief currency strategist at Scotia Capital in
Toronto.
                                
 "Today's (data) releases were positive for the euro,"
Sutton said. "The inability to rally on good news is never a
good sign."
                                
 For the week the dollar was on pace to record its best
performance in almost two years against a basket of currencies
of its major trading partners.<.DXY>.
                                
 Against the yen <JPY=> the greenback was up 0.27 percent at
86.16 yen, above this week's 15-year trough of 84.72 yen.
                                
 U.S. Treasury bond yields fell on fresh safe-haven buying
after the U.S. data pointed to low growth and low inflation.
Benchmark 10-year Treasury yields dropped to 2.70 percent
<US10YT=RR>.
                                
 September Bund futures <FGBLc1> hit a record high at
131.44, surpassing the previous peak at 131.40 set on Thursday,
and were last up 12 ticks on the day at 131.34. The 10-year
Bund yield <DE10YT=TWEB> plumbed a record low at 2.399
percent.
                                
 U.S. light sweet crude oil <CLc1> fell 35 cents to  $75.39
per barrel. Spot gold prices <XAU=> rose $2.90 to $1214.10.
 (Additional reporting by Wanfeng Zhou, Angela Moon, Brian
Gorman, Naomi Tajitsu, Ian Chua Tamawa Desai; Editing by Dan
Grebler)