EMERGING MARKETS-LatAm stocks drop on falling risk appetite

* MSCI Latin America stock index down over 3 percent

* EMBI+ index strip spread unchanged versus US Treasuries

By Daniel Bases

NEW YORK, Nov 12 (Reuters) - Investors sold emerging market
assets on Thursday, taking their cues from a combination of
weak global equities and falling prices for key export
commodities such as oil and metals.

A rising U.S. dollar undermined the commodity markets and
put pressure on higher-yielding Latin America's currencies.
Risk-takers were on the sidelines after several policy makers
around the world warned the economic recovery was fragile.

Emerging market credit spreads were nearly unchanged
against the U.S. Treasury market, which started to recover
ground as U.S. equities fell.

"The (credit) market is moving sideways from indigestion of
lots of debt issuance. That theme is an ongoing one. There has
been huge amounts issued," said David Spegel, global head of
emerging markets strategy at ING.

"I think investors just have their eyes on what is
happening in U.S. equity markets. It has been pretty much
tracking what's been happening in the S&P (500). It suggests a
lot of the market performance is dealer driven," he added.

According to ING data, November has seen debt issuance of
about $9 billion between corporate and sovereign instruments.
That put 2009 over the top as a record year for issuance at
$195.5 billion versus the prior record of $191 billion in 2007,
Spegel said.

Spreads on the benchmark JP Morgan Emerging Markets Bond
Index Plus 11EMJ.JPMEMBIPLUS were unchanged at 303 basis
points over U.S. Treasuries.

In stocks, MSCI's Latin America's stocks were down over 3
percent .MILA00000PUS, its worst performance in nearly two
weeks.

The broader emerging markets stock index was down 1.59
percent .MSCIEF.

Mexican share prices fell, dragged down by a 0.79 percent
slide in Wal-Mart de Mexico (WALMEXV.MX). The retailer's U.S.
parent, Wal-Mart, posted higher-than-expected third quarter
earnings but forecast earnings for the upcoming holiday period
that could miss analyst views as it citetd concerns about
rising U.S. unemployment.

The Mexican peso fell 0.40 percent against the U.S. dollar
to trade at 13.20 MXN=MEX01.

Profit-taking pulled Brazil's benchmark Bovespa index
.BVSP down 3 percent in late afternoon trade. The Brazilian
real dropped 0.98 percent to 1.7390 to the greenback BRBY.

The rising U.S. dollar spelled trouble for commodity
prices, as the materials become more expensive as the U.S.
currency gains ground.

Crude oil prices fell over 3 percent to under $77 a barrel
CLc1. The combination of a strengthening U.S. dollar and
increases in crude inventories were seen as the main reasons
for the weakness.

Spot gold lost 1.23 percent to $1,103.70 an ounce XAU=
while copper lost 0.61 percent of its value HGc1.

Separately, Argentina replaced the head of the country's
markets regulator. Finance Minister Amado Boudou said the move
to remove Eduardo Hecker was done in an effort to revive
debilitated capital markets. For more, click [ID:nN12413627]
(Additional reporting by Michael O'Boyle in Mexico City and
and Walter Bianchi in Buenos Aires; Editing by Leslie Adler)