* MSCI world share index down 0.4 pct after three-day rally
* Uncertain central bank policy outlook weighs on oil and
* Spain's bank problems, German economic slowdown in focus
By Wanfeng Zhou
NEW YORK, June 8 Global stocks, the euro and oil
prices fell o n F riday after hopes for more stimulus from central
banks faded, with expectations Spain will seek assistance for
its banks likely to keep investors cautious.
On Wall Street, stocks were little changed as investors
awaited the outcome of talks in Europe on Spain's ailing banks.
Senior EU officials said finance ministers of the 17-nation
single currency area would hold a conference call o n S aturday to
discuss Spain's request for an aid package for its banks,
although no figure had been set.
Losses in world shares followed a three-day rally built on
expectations of global coordinated efforts to bolster slackening
economic growth. But investors were disappointed after neither
the European Central Bank nor the U.S. Federal Reserve signaled
"Financial markets are bipolar," said Ward McCarthy, chief
financial economist and managing director, fixed income division
at Jefferies & Co in New York. "Periodic fits of irrational
exuberance are followed by the acknowledgement of reality. That
is why it was risk on earlier this week and risk off today."
MSCI's world equity index was down 0.4
percent at 300.01. The index is still up 2.6 percent on the
week, on pace for its best week since January.
U.S. stocks turned positive after a lower open. The Dow
Jones industrial average was up 47.19 points, or 0.38
percent, at 12,508.15. The Standard & Poor's 500 Index
was up 4.64 points, or 0.35 percent, at 1,319.63. The Nasdaq
Composite Index was up 12.62 points, or 0.45 percent, at
Top European shares trimmed early losses to trade
0.24 percent lower.
U.S. President Barack Obama said on Friday that European
leaders face an "urgent need to act" to resolve the region's
financial crisis as the threat of a renewed recession there
spells dangers for an anemic U.S. recovery five months before
The euro fell 0.7 percent to $1.2487, retreating from
a two-week high of $1.2625 hit o n T hursday.
More losses would leave the euro vulnerable to a test of the
23-month low of $1.2286 hit on June 1, using Reuters data, after
failing to break above chart resistance at $1.2623, the January
Rating agency Fitch slashed Spain's credit rating on
Thursday, leaving it just two notches short of junk status. It
signaled further downgrades could come as the country tries to
restructure its troubled banking system.
Adding to the bearish sentiment was data showing Italian
industrial production fell far more than expected in April and
German imports tumbled at their fastest rate in two years.
Brent crude for July was down $1.56 to $98.37 a
barrel, after hitting a low of $97.19.
U.S. crude prices fell $1.45 to $83.37 a barrel,
having touched a low of $82.00. Both contracts are down for a
Copper fell to its lowest since December as investors feared
China's surprise interest-rate cut was a sign of a sharp
slowdown in the world's biggest metals consumer.
The metal, seen as a barometer of global economic health, is
on track to extend its losing streak to a sixth week, its
longest such run in two years.
Spot gold was at $1,587.75 an ounce, down from
$1,589.15 late in New York the previous day.
The benchmark 10-year U.S. Treasury note was up 8/32, the
yield at 1.6149 percent.