GLOBAL MARKETS-U.S. stocks skid on recession fears, gold soars

(Recasts with U.S. market, adds byline; dateline previous LONDON)

By Herbert Lash

NEW YORK, Feb 21 (Reuters) - Fresh worries about the U.S. economy kept U.S. stocks under wraps on Thursday and sparked buying of safe-haven debt as precious metals hit new highs and the dollar slumped to two-week lows against the euro.

In Europe, stocks managed to close higher as bank shares rose on expectations of further U.S. interest rate cuts, but gains were pared late in the day on signs of the struggling U.S. economy.

Oil pulled back from all-time highs above $100 a barrel on Wednesday on a rise in crude oil inventories.

Worries that the United States is falling into recession were reignited with the release of data by the Philadelphia Federal Reserve showing manufacturing in the mid-Atlantic region slowed to a seven-year low in February and as an index of future economic activity declined for a fourth straight month.

The data sparked expectations that the Federal Reserve will further cut interest rates at its policy meeting in March. Interest rate futures markets now have almost fully priced in another half-percentage-point interest rate cut at the March meeting, up from an 82 percent chance before the sharp fall in the Philadelphia Fed's business index. FEDWATCH

"This is the problem: you may have your bright spots but you're going to continue to get bouts of very negative economic data," said Stephen Massocca, co-chief executive at Pacific Growth Equities in San Francisco.

"These problems aren't going away any time soon," he said. "The consumer is going to be crimped for a while. All of that is going to lead to troubling economic indicators, and those are going impact stocks."