* Global stocks fall on fears of worsening European crisis
* Swiss franc tumbles on SNB's move to stop franc gains
* Benchmark German and U.S. debt yields near historic lows
* Gold slips from record high, still near $1,900 an ounce (Updates market prices, adds quote from J.P. Morgan)
By Richard Leong
NEW YORK, Sept 6 (Reuters) - Global stock markets fell on Tuesday on fears of the European debt crisis worsening, while the Swiss franc lost nearly 10 percent against the euro after Switzerland's central bank sought to slow the safe-haven rush into its currency, which it worries could hurt its economy.
Nervous investors channeled cash into less risky assets as doubts resurfaced over Italy and Greece's willingness to implement tough budget and debt measures demanded by other euro zone members, while Germany hardened its stand against giving them more aid. For more see [ID:nL5E7K61RE].
"Europe is where you have to be focused right now, and Europe doesn't look good," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
Wall Street stocks <.DJI> <.SPX> <.IXIC> were down 1.5 percent after a three-day holiday weekend, with Friday's U.S. jobs report, which showed zero net jobs growth, also hurting investor confidence. [.N]
The Swiss central bank set a limit of 1.20 francs to the euro in an attempt to keep its currency strength from damaging the economy. Global investors have poured money into the Swiss franc seeking a relatively safe asset.
The move took some of the shine off gold, but it was not far below its record high above $1,900 an ounce.
U.S. and German government debt, perceived as safer assets amid the turmoil, rallied and pushed benchmark yields to historic lows. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Insider show, click on:
http://link.reuters.com/bab63s
BREAKINGVIEWS column: [nL5E7K61GT]
Graphic on move in EURCHF: http://link.reuters.com/mab63s
Gold correlation with dollar: http://r.reuters.com/ryx52s
Inflation adjusted gold price: http://r.reuters.com/pun62s
U.S. services sector: http://r.reuters.com/sec63s
U.S. and world services PMI: http://r.reuters.com/tec63s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The pan-European FTSEurofirst 300 <.FTEU3> was down 0.7 percent after falling more than 4 percent on Monday on renewed worries about Europe's ability to solve its debt problems.
U.S. and European equities pared their losses after a report showed that growth in the U.S. services sector unexpectedly improved in August. [ID:nN1E7850QA]
This snapshot soothed some worries that the world's biggest economy is on the brink of recession, but not enough to scale back expectations the Federal Reserve would engage in another round of monetary stimulus to boost sluggish U.S. growth.
Policy-makers on both sides of the Atlantic are struggling to come up with economic fixes, as Americans and Europeans have grown skeptical or even hostile to more proposed stimulus programs and/or steep budget cuts to reduce government debt.
G7 finance ministers and central bankers will convene in Marseilles, France starting on Friday. The two-day meeting could reveal further erosion among the world's wealthiest nations to allowing markets to set exchange rates.
"The G7 normally supports 'free-floating' currency policies (often as a veiled push for China to let the yuan appreciate faster). However, the group will be at odds this week to hold to that line, given coordinated G7 efforts in March to weaken the yen and efforts by at least three of the seven G7 members to depreciate local currencies in the last year or so," Rebecca Patterson, chief market strategist with J.P. Morgan Asset Management, wrote in a client note on Tuesday.
World stocks as measured by MSCI <.MIWD00000PUS> fell 1.6 percent, while Japan's Nikkei <.N225> closed off 2.2 percent.
After the Swiss National Bank announcement, the euro was trading at just above the central bank's new target of 1.20 Swiss francs
The euro touched an eight-week low against the dollar and was last trading at $1.3979
Ten-year German and U.S. government debt yields
The Swiss central bank's move rocked a number of other assets, notably gold
In the oil market, U.S. crude futures for October delivery