GLOBAL MARKETS - Earnings, economy worries shake investors

By Jeremy Gaunt, European Investment Correspondent

LONDON (Reuters) - World stocks fell on Monday, with particularly heavy losses in emerging markets, as investors fretted about a coming wave of corporate earnings and confidence in a rapid global economic recovery faded.

Oil dipped briefly below $59 a barrel in a sell-off prompted by concern over a tailing off of demand if the economy stutters again.

"I don't think we will see an economic recovery this year and ... earnings estimates are still too high, so there is room for disappointment," Philippe Gijsels, senior equity strategist at Fortis Bank, in Brussels.

World stocks as measured by MSCI lost close to three quarters of a percent. The FTSEurofirst 300 index of top European shares was down 0.3 percent after hitting an 11-week low.

The slide was not arrested by Dutch conglomerate Philips Electronics surprising the market with a return to profit in the second quarter and saying it was hopeful of an upturn in business in the second half of 2009.

Emerging markets suffered more acutely, taking the MSCI sector index down 2.2 percent. The sector has been the big winner as investors have banked on a recovering economy, so would likely unwind quicker if a major correction set in.

So far in the U.S. earnings season, two major U.S. companies had reported, giving investors mixed signals. Bellwether Alcoa reported a third consecutive quarterly loss, but beat estimates; oil major Chevron warned that second-quarter earnings would be hit by a decline in U.S. refining margins.

Among U.S. companies reporting this week are Goldman Sachs, JP Morgan, Bank of America, Citi, IBM, Google, Intel and GE.