Mexico stocks slip on U.S. worries; peso firms

MEXICO CITY, July 4 (Reuters) - Mexican stocks fell on Friday as steadying oil prices failed to abate concerns that more costly fuel could hobble the economy in the United States, Mexico's main trading partner.

The benchmark IPC stock index .MXX closed 0.45 percent lower at 28,338.12 points, marking its fourth straight day of losses and a four-month low. Trading was volatile in low volume with U.S. markets closed for the Independence Day holiday.

The peso <MXN=> MEX01 firmed 0.21 percent to 10.3335 per dollar.

U.S. light crude CLc1 retreated more than $1 a barrel on Thursday after setting a record above $145 a barrel.

But the pullback provided little comfort to investors worried that the 50 percent rise in crude prices this year will push American consumers to spend less on other goods, and further weaken the slowing U.S. economy.

"It's not the price today that's the worry, but what is ahead. We are talking about prices of $200 per barrel in a not-so-distant future," one trader in Mexico City said.

A prolonged slowdown in the United States, where growth has weakened amid a housing downturn and a credit crunch, would likely drag on the economy in Mexico, which sends more than 80 percent of its exports to its northern neighbor.

The peso gained as investors bet a weak U.S. economy will keep the Federal Reserve from raising interest rates any time soon despite the inflationary pressures from higher oil prices.

While the United States is seen staying on hold, Mexico's central bank may raise interest rates as soon as its next monthly policy meeting on July 18.