* World stocks on track for worst week since August 2010
* Threats of Spanish downgrade, U.S. default, data weigh
* Swiss franc, gold rally to record highs (Updates prices, adds comment, details, changes byline, dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, July 29 (Reuters) - World stocks headed for their biggest weekly loss in almost a year on Friday while the U.S. dollar fell after efforts to stave off a U.S. debt default suffered a new blow and data showed meager growth in the U.S. economy.
Investors piled into perceived safe-haven assets, pushing the Swiss franc to record highs against both the dollar and euro. Gold prices also rallied to a fresh record high above $1,630.
U.S. Republican leaders scrambled on Friday to rescue their budget deficit-cutting plan after conservatives mounted a rebellion that heaped uncertainty on efforts to avert a catastrophic debt default. House Republicans were due to meet at 10 a.m. (1400 GMT) to discuss a way forward.
Adding to investor gloom, the U.S. economy came perilously close to flat-lining in the first quarter and grew at a meager 1.3 percent annual rate in the April-June period as consumer spending barely rose. For details, see [ID:nCAT005481]
"Disappointing number, but I'm not surprised, considering the uncertainty in the market over the debt ceiling, regulations and so forth," said Matthew Keator, partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
"Structurally, corporations are doing a good job, but on the macro side, with all the uncertainty, it isn't surprising that we're seeing this type of headwind."
Wall Street stocks opened sharply lower. The Dow Jones industrial average <.DJI> was down 113.79 points, or 0.93 percent, at 12,126.32. The Standard & Poor's 500 Index <.SPX> was down 13.43 points, or 1.03 percent, at 1,287.24. The Nasdaq Composite Index <.IXIC> was down 31.53 points, or 1.14 percent, at 2,734.72.
World equities as measured by the MSCI world equity index <.MIWD00000PUS> fell 0.8 percent. The benchmark index has fallen more than 3 percent this week, on track for its biggest weekly loss since August, 2010.
European stocks <.FTEU3> lost 1.3 percent following a string of disappointing corporate results. Emerging stocks <.MSCIEF> were down nearly 1 percent.
Even if U.S. lawmakers agree on a last-minute deal, many investors believed it would not prevent ratings agencies from downgrading the U.S. credit rating.
"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, strategist at IG Markets.
DOLLAR FALLS
The dollar plunged to all-time lows against the Swiss franc of 0.78749
Japanese 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
Fears of contagion arising from euro zone's debt crisis grew after rating agency Moody's placed Spain's Aa2 credit rating on review for possible downgrade. The move followed Thursday's disappointing Italian auction which saw 10-year bonds sold at the highest yield in 11 years.
"These sovereign debt problems are leading to a decent demand for safe-haven currencies like the yen and the Swiss franc," said Roberto Mialich, FX strategist at Unicredit.
Spot gold
Ten-year Treasury notes
(Additional reporting by Angela Moon, Gertrude Chavez-Dreyfuss and Frank Tang in New York, and Carolyn Cohn and Natsuko Waki in London) (Editing by Theodore d'Afflisio)