GLOBAL MARKETS-Shares retreat on world growth fears but oil rises

Wed Oct 10, 2012 12:36pm EDT

* Corporate warnings hit shares amid weak global outlook
    * Oil up as Mideast supply worry offsets growth concerns
    * Euro rebounds as investors await decision on Spain


    By Herbert Lash
    NEW YORK, Oct 10 (Reuters) - Global shares fell for a third
day on Wednesday as corporate warnings of slower growth
underscored concerns about a sluggish world economy, while oil
prices rebounded over worries about the security of Middle East
crude supplies. 
    Weak risk sentiment hurt equity markets after warnings from
the International Monetary Fund, the World Bank and U.S.
multinationals about the lackluster world economic outlook.
    After the close of trading on Tuesday, Alcoa warned of
dwindling aluminum consumption, while other large companies,
including Dow component Chevron and engine maker Cummins
Inc, cautioned about slowing growth.
    "You've seen very cautionary earnings results and even
forward guidance; Alcoa has good earnings, but their forward
guidance is lackluster," said Richard Weeks, managing director
at HighTower Advisors in Vienna, Virginia. "It points to a slow
China and slow global growth." 
    The Dow Jones industrial average was down 72.94
points, or 0.54 percent, at 13,400.59. The Standard & Poor's 500
Index was down 5.59 points, or 0.39 percent, at 1,435.89.
The Nasdaq Composite Index was down 7.99 points, or 0.26
percent, at 3,057.03. 
    Ebbing growth in China, the world's No. 2 economy, is
expected to rein in corporate earnings in the third quarter and
dent profit forecasts as the Asian nation feels the pinch of the
debt crisis in the euro zone, a key trading partner. 
    The World Bank cut its growth forecast for East Asia earlier
in the week on concerns China's slowdown could last longer than
expected. 
    On Tuesday, the International Monetary Fund said a deepening
euro zone debt crisis threatened the global economy. 
    In Europe, the FTSEurofirst 300 index of top
company shares fell 0.5 percent to close at 1,090.03, while
MSCI's all-country world equity index also
slipped 0.5 percent.
    The euro rebounded slightly after falling to its lowest in
more than a week against the dollar, pressured by uncertainty
about whether Spain will apply for a bailout, widely considered
the next step forward for Europe.
    The euro was up 0.08 percent at $1.2894 after
touching 1.2884. The U.S. dollar index was down 0.05
percent at 79.912.
    European Union leaders are scheduled to meet at the end of
next week. Euro zone finance ministers delivered a united
defense of Spain at a meeting this week, saying the country did
not need a bailout, at least for now.
    "We are in a holding pattern," said John Doyle, currency
strategist at Tempus Consulting in Washington. "What we're going
to look for the rest of the day and probably next week and a
half is if there's any news coming out of Spain and possible
decision on a full bailout or not."
     Oil edged up in choppy trading as concerns about the
security of Middle East supplies amid escalating tensions over
Syria helped offset fears that slowing world growth will curb
demand.
    Shelling along the Turkey-Syria border, hostility between
Iran and the West and an impending Israeli election have
reinforced fears of potential threats to Mideast oil supplies.
    Turkey's military chief of staff said on Wednesday his
troops would respond with greater force if bombardments from
Syria kept hitting Turkish territory. 
    Brent crude gained 47 cents to $114.97 a barrel.
U.S. crude rose 41 cents to $92.80.
    U.S. Treasuries prices fell as traders reduced bond holdings
to make room for $21 billon in 10-year note supply, part of this
week's $66 billion in coupon-bearing offerings.
    The benchmark 10-year U.S. Treasury note was
down 4/32 in price to yield 1.7254 percent.
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