GLOBAL MARKETS-Euro at 18-month low on debt woes; stocks sink

                                
  
                                
 * Fiscal austerity sparks worries about growth
                                
 * Gold hits all-time intraday high, later erases gains
                                
 * S&P 500 falls over 2 pct despite positive U.S. data
 (Updates with U.S. markets' close)
                                
 By Walter Brandimarte
                                
 NEW YORK, May 14 (Reuters) - The euro slid to 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 prices hit an all-time high as the European financial
situation spurred the appetite for safer investments. The
precious metal erased gains later but still ended the week
about 2 percent higher.
                                
 Safe-haven buying also boosted prices of U.S. Treasury debt
and the value of the U.S. dollar, which climbed to its highest
level in a year against a basket of currencies.
                                
 Stocks and oil prices plunged despite data showing U.S.
retail sales and industrial production rose in April. The S&P
500 and the Nasdaq fell nearly 2 percent while U.S. crude oil
prices slumped nearly 4 percent.
                                
  For details on U.S. economic data, see [ID:nN14138390].
                                
 European authorities announced a rescue plan of nearly $1
trillion for Greece and other indebted euro zone countries this
week involving tough spending cuts, but investors were
skeptical about 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 <.DJI> ended down 162.79
points, or 1.51 percent, at 10,620.16, while the Standard &
Poor's 500 Index <.SPX> lost 21.76 points, or 1.88 percent, to
1,135.68. The Nasdaq Composite Index <.IXIC> slumped 47.51
points, or 1.98 percent, to 2,346.85.
                                
 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 9.9 percent to $77.26
and MasterCard Inc <MA.N> shed 8.5 percent to $212.45.
[ID:nN13100251]
                                
 The MSCI world equity index <.MIWD00000PUS> plunged 2.4
percent, while the FTSEurofirst 300 index <.FTEU3> dropped 3.4
percent.
                                
 Banks took a beating in Europe, with the STOXX Europe 600
banking index <.SX7P> falling 5.2 percent. Spanish banks
Santander <SAN.MC> and BBVA <BBVA.MC> fell 9.0 percent and 7.6
percent, respectively.
                                
 U.S. crude oil <CLc1> fell 3.75 percent to $71.61 a barrel,
the lowest close since Feb. 5.
                                
 EURO BATTERED
                                
 The EU's emergency assistance plan has done little to
bolster confidence in the euro, a concern highlighted by U.S.
While House Economic Adviser Paul Volcker. On Thursday Volcker
said European debt troubles could undermine the single
currency. [ID:nN13133498]
                                
 The euro <EUR=> slid as low $1.2358 on electronic trading
platform EBS, the lowest since October 2008. It last traded at
$1.2370, 1.3 percent weaker.
                                
 "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 single European currency
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 turmoil
in financial markets, soared to a record high of $1,248.95.
                                
 But investors started selling the metal when it failed to
break above the psychological level of $1,250. Part of the
sales also came from investors who needed to sell gold to cover
for losses in stock markets, traders said.
                                
 The precious metal later traded practically flat at
$1,230.05 an ounce.
                                
 The safe-haven appeal of U.S. Treasuries also rose
dramatically, with the price of the benchmark 10-year note
<US10YT=RR> up 21/32, with the yield at 3.4571 percent.
                                
 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. [ID:nTOE64D02U]
                                
 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 Kenneth Barry)