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GLOBAL MARKETS-Global stocks, oil slip on waning risk appetite

Published 09/18/2009, 01:34 PM
Updated 09/18/2009, 01:36 PM
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* U.S. shares buck global trend, rise on stock upgrades

* U.S. dollar climbs as appetite for risk wanes again

* Oil falls below $72 a barrel as stocks slip, dollar rise

* Bonds ease as issuance concerns fill data void (Updates with U.S. markets activity, changes dateline; previous LONDON)

By Herbert Lash

NEW YORK, Sept 18 (Reuters) - Global stocks faltered and oil prices fell below $72 a barrel on Friday as waning risk appetite lifted the U.S. dollar against most major currencies.

Analysts said a lack of conviction that the global economic downturn was indeed ending had dragged down oil and equities markets on expectations that fuel demand could stay weak.

U.S. Treasury debt prices eased as a dearth of economic data brought the prospect of $112 billion in new bonds coming to market next week into fuller focus. For details, see: [ID:nN18539395]

No major U.S. data was scheduled for release on Friday.

U.S. gold futures turned lower as the dollar partially recouped recent losses. Copper fell, weighed by rising inventories and broad-based losses among commodities linked to a stronger dollar. [ID:nN18391014] [ID:nLI459856]

World equities came under pressure after scaling an 11-month peak as investors took stock of recent hefty gains. The MSCI all-country world index <.MIWD00000PUS> fell 0.25 percent after touching a high last seen in early October.

But Wall Street moved higher after brokerages upgraded stocks in several sectors, and investors braced for possible volatility from the expiration of options on Friday.

"There's not a whole lot of really bad news out there, and there is a bit of good news, and that is teetering the market up a bit," said Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas.

Chevron Corp gained 1.2 percent to $72.85 after Credit Suisse upgraded the shares to "outperform." [ID:nBNG455263]

Procter & Gamble Co jumped 3.3 percent to $57.33 after Citigroup upgraded the stock to "buy" on news P&G is ready to lower prices to win back market share. P&G was the top boost to the 30-stock Dow Jones industrial average. [ID:nBNG419626]

At 1 p.m., the Dow <.DJI> was up 48.60 points, or 0.50 percent, at 9,832.52. The Standard & Poor's 500 Index <.SPX> was up 3.34 points, or 0.31 percent, at 1,068.83. The Nasdaq Composite Index <.IXIC> was up 6.25 points, or 0.29 percent, at 2,133.00.

"There is still no indication that the market wants to come down. We are not generating enough noise or investment debate to suggest that the market is tired," said Geoff Wilkinson, head of investment research at Mint in London.

"There is some strong suspicion that some of the moves we have seen recently is driven by people who need to buy this market, rather than want to," he said.

European shares pulled back from an 11-month high set on Thursday as commodity stocks slipped, but Britain's leading share index logged a sixth straight session of gains, supported by an early rise on Wall Street,

The FTSEurofirst 300 <.FTEU3> of top European shares closed 0.5 percent lower at 1,006.50 points

The FTSE 100 <.FTSE> in London closed up 0.2 percent at 5,172.89, another 12-month closing high.

"The day is very quiet, with volumes low and options expiries offering the only real direction and, investors just unwinding a few positions ahead of the weekend," said Arifa Sheikh-Usmani, an equity trader at Spreadex.

Euro zone government bond prices gave back initial gains in a quiet session after U.S. Treasuries slipped at midsession. Weakening bourses provided Bunds with good support.

U.S. government debt sagged on the prospect of heavy supply. Benchmark 10-year notes fell 10/32 in price to yield 3.43 percent.

U.S. crude for October delivery fell 33 cents to $72.14, after touching a low of $71.27 in earlier trade. London Brent fell 17 cents to $71.34.

The euro dipped to $1.4722, down 0.1 percent, after hitting a one-year high on Thursday.

The dollar index <.DXY>, which measures the dollar's value against a basket of six major currencies, rose 0.4 percent to 76.457, having bounced off Thursday's one-year low of 76.010.

The December gold contract was down $2.50 at $1,010.90 an ounce in New York.

Asian stocks retreated from 13-month highs as a conflicting picture about the strength of a U.S. economic recovery stopped investors from extending this week's rally.

The Nikkei index <.N225> fell 0.7 percent, breaking a three-day rally, while the MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> dipped 0.6 percent. (Reporting by Chuck Mikolajczak, Nick Olivari and Pedro Nicolaci da Costa in New York; Chris Baldwin and Dominic Lau in London; writing by Herbert Lash; editing by Padraic Cassidy)

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