* Wall Street slips as weak data dims economic outlook
* Dollar drops vs yen after U.S. durable goods report
* Bonds flat to down ahead of 5-year note auction
* Oil drops below $77 a barrel on higher crude inventory
(Adds close of European markets)
By Herbert Lash
NEW YORK, July 28 (Reuters) - World stocks slipped,
threatening to halt a fifth straight day of gains on
Wednesday, as weak orders for U.S. durable goods in June
cooled the economic outlook and drove the dollar lower.
New orders for long-lasting U.S. manufactured goods fell
unexpectedly for a second straight month, marking their
largest decline since August, in a fresh sign the economy had
slowed in the second quarter. But some analysts said the
report was respectable after stripping out certain categories.
For details see; []
Still, the dollar fell versus the Japanese yen as the news
increased concerns about the U.S. outlook and analysts said
the Federal Reserve is likely to report softer economic
conditions when it releases its Beige Book report on recent
regional economic conditions later during the session.
[]
Oil fell below $77 a barrel after an industry report
showed an unexpected rise in U.S. crude stockpiles and the
durable goods data fueled doubts about the pace of recovery in
energy demand. []
The Commerce Department said U.S. durable goods orders
fell 1.0 percent in June after a revised 0.8 percent drop in
May. Analysts forecast an increase of 1.0 percent.
"Combined with the confidence numbers yesterday, they
don't bode well for continued progress in the economy," said
Alan Lancz, president of an investment management firm that
bears his name in Toledo, Ohio. "It will be more difficult to
break out of the trading range (for stocks) and might be
settling back a little bit."
However, Michael Woolfolk, senior currency strategist at
BNY Mellon in New York, said the durable goods report is
always difficult to digest. The number was negative because of
commercial aircraft orders, he said.
"If you strip out aircraft and defense, you're left with a
respectable rise of 0.6 percent" in the important capital
goods category, he said.
Those orders were up 15.2 percent on a year-on-year
basis.
"That's consistent with a strong recovery in industrial
production and durable goods orders. So these numbers are not
very concerning," Woolfolk said.
MSCI's all-country world index <.MIWD00000PUS> traded
flat, and the Thomson Reuters global stock index <.TRXFLDGLPU>
was slightly lower.
Earnings reports in Europe and Japan supported equity
markets earlier, but the economic data weighed on sentiment
already soured by a Tuesday report that U.S. consumer
confidence in July fell to its lowest since February.
European stocks ended a one-week rally on the U.S. durable
goods data, which revived worries about the economy and
prompted investors to book some of their recent gains.
The FTSEurofirst 300 <> index of top European shares
trimmed early gains, slipping 0.31 percent to close at
1,050.88 points.
At 12:54 p.m. (1654 GMT), the Dow Jones industrial average
<> was down 7.64 points, or 0.07 percent, at 10,530.05.
The Standard & Poor's 500 Index <.SPX> was down 2.97 points,
or 0.27 percent, at 1,110.87. The Nasdaq Composite Index
<> was down 11.83 points, or 0.52 percent, at 2,276.42.
With the S&P's 200-day moving average currently around
1,114, traders are struggling to determine if it is the top of
a recent rally or a consolidation point before further gains.
U.S. corporate results continued to surprise on the
upside.
Aircraft maker Boeing Co <BA.N>, defense contractor
General Dynamics Corp <GD.N> and ConocoPhillips <COP.N>, the
No. 3 U.S. oil company, all beat expectations.
After almost half of the S&P 500 having reported earnings,
77 percent of companies have beat expectations, according to
Thomson Reuters Proprietary Research.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.09 percent at 82.114.
The euro rose above $1.30, but has been stuck in a range
recently. Woolfolk said it will take a change in risk
sentiment to start a new trend in dollar-euro trade.
The euro <EUR=> was unchanged at $1.2993.
Against the yen, the dollar <JPY=> dipped 0.20 percent to
87.70.
Sterling hit a five-month high against the dollar at
$1.5630 as earlier comments from the Bank of England did
little to quell optimism about the UK economic outlook.
[]
Copper rose to its highest point since early May after
assurances on economic growth from top metals consumer China
and improving fundamentals. []
U.S. Treasuries eased to trade flat to slightly lower
after gaining on the U.S. durable goods data.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
unchanged in price to yield 3.05 percent just ahead of the
government's auction of 5-year notes at 1 p.m. (1700 GMT).
U.S. light sweet crude oil <CLc1> fell 65 cents to $76.87
a barrel.
Earlier, Japan's Nikkei <> climbed 2.7 percent for
its highest close and biggest one-day gain in two weeks.
MSCI's index for Asian stocks less Japan <.MIAPJ0000PUS>
trimmed gains to trade flat.
(Reporting by Matthew Lynley, Vivianne Rodrigues, Ellen
Freilich in New York; Christopher Johnson in London; Blaise
Robinson in Paris; Writing by Herbert Lash; Editing by Jan
Paschal)
