* World stocks on track for worst week since August 2010
* Threats of Spain downgrade, U.S. default, data weigh
* Safe-haven Swiss franc, gold, Treasuries rally (Updates prices, adds comment, details)
By Wanfeng Zhou
NEW YORK, July 29 (Reuters) - World stocks headed for their biggest weekly loss in almost a year on Friday as investors piled into safe-haven assets on worries about sovereign debt crises on both sides of the Atlantic and data which showed meager growth in the U.S. economy.
The Swiss franc, a traditional safe-haven currency, rose to record highs against both the dollar and the euro, and gold prices soared to a record high above $1,630.
With four days remaining until the United States hits its debt limit, President Barack Obama on Friday told deeply divided Republicans and Democrats to stop bickering and find a way "out of this mess." For details, see [ID:nN1E76S004]
Fears that Europe's debt crisis was spreading also grew after Moody's Investors Service threatened to downgrade Spain's credit rating. [ID:nN1E76S004]
Adding to investor gloom, the government reported the U.S. economy grew at a meager 1.3 percent annual rate in the second quarter as consumer spending barely rose. The government also said the economy came perilously close to flat-lining in the first quarter, a sharp downward revision from its previous estimate. [ID:nCAT005481]
"The U.S. debt talks will remain front and center going into the weekend and the uncertain outcome will probably lead to more deleveraging today, especially after weak U.S. data and Moody's decision to put Spanish debt on negative watch," said Kathy Lien, director of currency research at GFT in New York.
Stock markets pared some losses after Obama said he was confident a solution could be reached on the debt ceiling talks. Traders also cited talk of possible amendments to the Republican version of a U.S. debt deal, which could lead to an eventual agreement.
At 1:48 p.m. EDT (1749 GMT), the Dow Jones industrial average <.DJI> was down 42 points, or 0.34 percent, at 12,198.11. The Standard & Poor's 500 Index <.SPX> was down 1.63 points, or 0.13 percent, at 1,299.04. The Nasdaq Composite Index <.IXIC> was up 5.75 points, or 0.21 percent, at 2,772.
World equities as measured by the MSCI world equity index <.MIWD00000PUS> fell 0.3 percent. The benchmark index has fallen 2.8 percent this week, and is on track for its biggest weekly loss since August 2010.
European stocks closed out their worst week since March, with the pan-European FTSEurofirst 300 <.FTEU3> finishing down 0.7 percent. Emerging market stocks <.MSCIEF> were down 0.7 percent.
Even if U.S. lawmakers agree on a last-minute debt limit deal, many investors believed that would not prevent credit ratings agencies from downgrading the United States' triple-A ratings.
"We're basically standing on the edge of an abyss, peeking over with the bottom nowhere to be seen. That's the situation facing all financial markets heading into a weekend that could prove to be one of the most crucial in history," said Ben Potter, a strategist at IG Markets.
SAFE HAVENS IN VOGUE
The dollar plunged to all-time lows against the Swiss franc of 0.7853
The dollar was on track for a monthly loss of about 4.2 percent against the yen, the biggest since December 2008. It shed about 6.1 percent against the Swiss franc in July -- the worst monthly performance since December 2010.
Japan Finance Minister Yoshihiko Noda warned about the strong yen, saying he would consider how long Japan could ignore current exchange rate moves without acting. [ID:nT9E7IE01O]
The euro
The weak U.S. economic data raised the prospect of further monetary accommodation, boosting demand for gold and U.S. government debt.
Spot gold
U.S. crude oil
Economic growth "was much weaker than the government had previously estimated and this opens the door for potentially another round of quantitative easing from the Federal Reserve," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.