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GLOBAL MARKETS-Stocks slip, oil down; euro drops vs Swiss fr

Published 05/26/2011, 12:47 PM
Updated 05/26/2011, 12:52 PM

* U.S. stocks, oil fall on disappointing data

* Renewed euro-zone worries add to market concern

* Euro falls vs Swiss franc; gold weakens from 3-week high (Updates prices)

By Caroline Valetkevitch

NEW YORK, May 26 (Reuters) - U.S. stocks lost early gains and oil prices fell as worries about an economic slowdown weighed on sentiment, while the euro hit a record low against the Swiss franc on renewed euro-zone debt worries.

Comments from Eurogroup president Jean-Claude Juncker, raising doubts over an IMF disbursement of financial support to Greece in June, put markets on edge, with the Dow and S&P 500 stock indices losting early gains and U.S. bonds adding to gains after the news.

Gold prices fell as the U.S. dollar recovered, led by a fall in euro-priced bullion.

Investors' desire to own stocks, commodities, and other risky assets remains fragile as U.S. economic growth showed signs of slowing further and as debt problems for Greece, Portugal and Ireland persisted.

"Most people have been baking into their assumptions that this recovery won't be too robust," said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, which oversees $14.5 billion.

The Standard & Poor's 500 Index <.SPX> was down 0.09 points, or 0.01 percent, at 1,320.38, while the FTSEurofirst 300 index <.FTEU3> ended down 0.07 percent.

The Dow Jones industrial average <.DJI> was down 29.97 points, or 0.24 percent, at 12,364.69. The Nasdaq Composite Index <.IXIC> was up 8.55 points, or 0.31 percent, at 2,769.93.

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In its second estimate of first quarter U.S. economic growth, the government kept its estimate unchanged at 1.8 percent after economists had forecast an upward revision. Adding to the latest batch of disappointing U.S. data was a surprise rise in weekly jobless claims. For more, see [ID:nN26233734] The number of Americans claiming unemployment benefits unexpectedly rose 10,000 to 424,000 last week.

The euro fell as low as 1.2235 Swiss francs, according to electronic trading platform EBS

"There's so much uncertainty. It's going to be hard for the euro to move much higher," said Ronald Simpson, director of currency research at Action Economics in Tampa, Florida. "It continues to be sold on even modest upticks."

Against the U.S. dollar, the euro was last at $1.4094, up 0.1 percent

The Financial Times quoted the head of the European Financial Stability Facility (EFSF) as saying China and other Asian investors were expected to buy a "strong proportion" of Portuguese bailout bonds when the euro zone's rescue fund starts auctioning them next month. See [ID:nL3E7GQ04U]

The U.S. dollar <.DXY> was down 0.4 percent against a basket of major currencies.

Benchmark 10-year Treasury notes

In the oil market, U.S. crude oil was down $1.21 at $100.11 while Brent crude was down 21 cents at $114.72.

Spot gold

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Tokyo's Nikkei <.N225> closed 1.5 percent higher, following Tuesday's in U.S. and European equities. (Additional reporting by Richard Leong, Ryan Vlastelica and Wanfeng Zhou in New York; and Natsuko Waki and Jessica Mortimer in London)

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