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GLOBAL MARKETS-Gloomy U.S., euro zone views hurt stocks, euro

Published 04/18/2011, 09:51 AM
Updated 04/18/2011, 09:56 AM
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* S&P revises its credit outlook on U.S. to negative

* Potential Greek debt restructuring in focus

* Finnish vote adds concerns about euro zone bailouts

(Updates market action, changes dateline)

NEW YORK, April 18 (Reuters) - A downgrade of the United States' credit outlook and worries over Europe's debt crisis battered investor confidence on Monday, spurring a sell-off in global stocks, the euro currency and U.S. Treasury bonds.

Rating agency Standard & Poor's revised its outlook on the United States to negative from stable, prompted by uncertainties about its ability to balance its budget and pare its huge indebtedness. For more, see [ID:nN18301465]

Across the Atlantic, the rise of an anti-euro party in Finland and growing unease about Greek debt exacerbated anxiety over how European policy-makers will handle the region's festering debt and bank problems.

Disappointing earnings and concerns about Japan's coming reporting season further eroded appetite for stocks and other risky assets.

Gold and silver hit new record highs.

MSCI's all-country world stock index <.MIWD00000PUS> started what is in many places a holiday-shortened week by losing 0.8 percent. In Europe the FTSEurofirst 300 <.FTEU3> was off 1.7 percent. The fall wiped out the European index's gains this year, leaving it in negative territory for 2011.

Wall Street stocks <.DJI> <.SPX> <.IXIC> lost 1.4 percent at the open while Japan's Nikkei <.N225> earlier closed down 0.36 percent. For more, see [.N]

In a weekend election, Finnish voters handed the anti-euro True Finns party a crucial role in parliament and possibly a path into government.

Finland's parliament has the right to vote on European Union requests for bailout funds, meaning it could in theory hold up costly plans to shore up Portugal and bring stability to debt markets. [ID:nLDE73G02L] [ID:nHEL010101]

Talk about Greek debt restructuring has also boiled up in recent weeks, including a Greek newspaper report on Monday that the government had asked the International Monetary Fund and European Union to start discussions on a restructuring.

A Greek finance ministry source said the report was not true. [ID:nATH006025] [ID:nLDE73H0DR]

The euro hit a 10-day low against the dollar on concerns about Greek restructuring and the Portuguese bailout. It fell 0.9 percent to $1.4305 , paring losses briefly against the dollar after the S&P downgraded its outlook on the United States.

In the bond market, the yield on the 30-year Treasury bond , which rises when there are jitters about U.S. creditworthiness, rose 5 basis points to 4.52 percent. For more, see [US/]

(Reporting by Richard Leong in New York; Jeremy Gaunt, Atul Prakash and Jessica Mortimer in London, Editing by Chizu Nomiyama)

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