* Skepticism about fiscal austerity drives risk aversion
* Gold falls from all-time high, Treasuries prices jump
* S&P 500 falls over 2 pct despite positive U.S. data
(Updates with European stock markets' close)
By Walter Brandimarte
NEW YORK, May 14 (Reuters) - The euro hit an 18-month low
versus the dollar and global shares fell sharply on Friday
over fears that Europe's fiscal austerity plans may derail
economic recovery.
Gold tumbled from an all-time high of $1,248.95 an ounce
on Friday to a session low at $1,219.05 after it was swept up
in selling of stocks and other commodities after it failed to
break above the $1,250 level. Earlier, gold had soared to a
record as concerns about the euro-zone debt crisis spurred
appetite for safer investments and drove the demand for U.S.
Treasury debt.
The dollar reached its strongest level in a year versus a
basket of key currencies.
Stocks and oil prices plunged despite data showing U.S.
retail sales and industrial production rose in April. The
three major U.S. stock indexes fell nearly 2 percent or more
while U.S. crude oil futures prices slumped nearly 4 percent
or almost $3 below $72 a barrel.
For details on U.S. economic data, see [].
European authorities announced a massive debt safety net
for Greece, Spain and Portugal this week, but investors remain
skeptical those countries can take the pain of overhauling
weak public finances.
"If you look long-term, everyone is worried about what
these austerity measures will mean in terms of growth," said
Kathy Lien, director of currency research at GFT in New York.
The Dow Jones industrial average <> lost 207.76
points, or 1.93 percent, at 10,575.19, while the Standard &
Poor's 500 Index <.SPX> fell 27.09 points, or 2.34 percent, to
1,130.35. The Nasdaq Composite Index <> was down 62.85
points, or 2.62 percent, at 2,331.51.
Shares of credit card companies tumbled a day after the
U.S. Senate voted to limit fees charged on credit and debit
card transactions. Visa Inc <V.N> lost 10 percent and
MasterCard Inc <MA.N> shed 9 percent. []
The MSCI world equity index <.MIWD00000PUS> plunged 2.7
percent, while the FTSEurofirst 300 index <> dropped
3.39 percent to close at 1,014.25, with banks taking a
beating.
The STOXX Europe 600 banking index <.SX7P> was down around
5.2 percent. Spanish banks Banco Santander <SAN.MC> fell 8.98
percent and and BBVA <BBVA.MC> lost 7.58 percent.
U.S. crude oil <CLc1> fell 3.86 percent to $71.53 per
barrel, after hitting a session low of $71.05, the lowest
since Feb. 8.
EURO BATTERED
The EU's emergency assistance plan has done little to
bolster confidence in the euro system, a concern highlighted
by U.S. While House Economic Adviser Paul Volcker. On Thursday
Volcker said European debt troubles could undermine the single
currency. []
The euro <EUR=> slid as low $1.2358 on electronic trading
platform EBS, the lowest since October 2008. It last traded at
$1.2393.
"The euro hasn't derived any benefits from any budget cuts
from Spain and Portugal," said Chris Turner, head of FX
strategy at ING, which forecasts the euro will be at $1.15 in
six months.
"People are either concluding that these cuts will be
unsuccessful and debt sustainability remains a key issue, or
they will be successful in aggressive fiscal tightening and
that these economies would slow aggressively and the European
Central Bank has to keep interest rates low," he added.
Gold prices <XAU=>, which often climb in times of risk
aversion, earlier soared to a record high of $1,248.95.
But when gold didn't hit $1,250 or break above it,
investors started selling the metal and it slid to a session
low of $1,219.05. By early afternoon in New York, spot gold
was trading at around $1,226.85.
The safe-haven appeal of U.S. Treasuries also rose
dramatically, with the price of the benchmark 10-year note
<US10YT=RR> up 24/32, while its yield slipped to 3.444 percent
shortly after 1 p.m. in New York.
Investors' anxiety towards riskier assets also has been
reflected in the movement of cash between markets this week.
Money market funds, perceived to be among the least risky
investments, attracted new money this week for the first time
since January as investors moved back into cash, data from
EPFR Global showed. []
At the same time, the amount of money pulled from risky,
high-yield bond funds hit a five-year high, while equity funds
in emerging markets also suffered.
(Additional reporting by Natsuko Waki in London and Wanfeng
Zhou in New York; Editing by Andrew Hay and Jan Paschal)
