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GLOBAL MARKETS-World stocks, euro slide on poor German data

Published 08/16/2011, 10:16 AM
Updated 08/16/2011, 10:20 AM

* Global stocks slip as German GDP growth disappoints

* Treasuries prices gain as data flags growth fears

* Euro slides from previous day's three-week high (Adds open of U.S. markets)

By Herbert Lash

NEW YORK, Aug 16 (Reuters) - Global stocks slipped and the euro slid on Tuesday after weak German and euro zone growth data rekindled concerns about the world economy and boosted demand for safe-haven assets like bonds and gold.

U.S. Treasuries prices gained and gold rose to $1,773.90 an ounce as concerns over the financial health of the euro zone resurfaced ahead of a summit in Paris between French President Nicolas Sarkozy and German Chancellor Angela Merkel. [ID:nL5E7JG0QN]

Weak German data -- gross domestic product growth in Europe's powerhouse economy slowed to 0.1 percent in the second quarter -- overshadowed the outlook for the two leaders to reach a credible solution to the bloc's debt crisis.

The euro fell more than 1 percent against the Swiss franc.

U.S. stocks fell in early trading after three days of gains and global stocks, as measured by MSCI's all-world equity index <.MIWD00000PUS>, fell 0.9 percent.

"Investors are relying on a strong Germany to lead Europe out of the financial mess it's in," said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.

"The data puts more weight on the double-dip camp," he said, referring to those who see the global economy slipping back into recession.

A better-than-forecast U.S. July industrial output report and Fitch's affirmation of the U.S. credit rating with a stable outlook gave initial support to Wall Street shares. But after the open, U.S. stock indexes traded lower.

The Dow Jones industrial average <.DJI> was down 105.50 points, or 0.92 percent, at 11,377.40. The Standard & Poor's 500 Index <.SPX> was down 13.81 points, or 1.15 percent, at 1,190.68. The Nasdaq Composite Index <.IXIC> was down 30.25 points, or 1.18 percent, at 2,524.95.

U.S. Treasury debt prices were higher.

The benchmark 10-year U.S. Treasury note was up 3/32 in price to yield 2.30 percent.

The dollar was up against a basket of major currencies, with the U.S. Dollar Index <.DXY> up 0.26 percent at 74.031.

The euro was down 0.34 percent at $1.4395.

Oil prices fell as worries about global economic growth and a stronger dollar reduced appetite for risky assets. [ID:nL5E7JG0UG]

North Sea Brent crude fell 1 percent to $108.79 a barrel, while U.S. light sweet crude oil fell $1.52 to $86.36.

Spot gold prices rose $9.39 to $1,774.30 an ounce. (Reporting by Gertrude Chavez-Dreyfuss, Rodrigo Campos and Karen Brettell in New York; Brian Gorman, Zaida Espana, Jan Harvey and Harpreet Bhal in London; Writing by Herbert Lash; Editing by Padraic Cassidy)

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