GLOBAL MARKETS-Euro, shares slip as euro zone recession deepens

Thu Feb 14, 2013 10:31am EST

* German GDP drop worst since 2009, France also contracts
    * Wall Street opens lower, following European shares lower
    * U.S. Treasury debt rises on safe-haven appeal
    * U.S. crude rebounds on U.S. unemployment claims


    By Herbert Lash
    NEW YORK, Feb 14 (Reuters) - Global equity markets fell on
Thursday on news the euro zone slipped deeper into recession
than expected in late 2012, while the dollar extended gains
against the euro after data showed U.S. jobless claims fell more
than expected last week.
    The euro zone's 17-country economy shrank 0.6 percent, with
Germany contracting 0.6 percent on the quarter, official data
for gross domestic product showed, marking its worst performance
since the global financial crisis was raging in 2009.
 
    Germany is expected to rebound but the figures suggest the
bloc as a whole could remain in recession in the first quarter
of this year, despite a recent jump in market sentiment as fears
that the currency bloc could fall apart faded.
    Stocks on Wall Street followed European equity markets
lower, with news that that Warren Buffett's Berkshire Hathaway
 and 3G Capital will pay $23 billion in cash to buy food
maker H.J. Heinz unable to turn investor sentiment.
    Berkshire and the private equity firm will pay $72.50 per
share, a 19 percent premium to the stock's all-time high.
    "The market has weakened because of the GDP numbers," said
Barclays commodities analyst Miswin Mahesh. "It's been a macro
sell-off this morning with the GDP numbers coming out rather
than any fundamental move in itself. Most asset classes have
sold." 
    MSCI's all-country world equity index fell
0.26 percent to 355.83, and the FTSEurofirst 300 index 
of top European companies slipped 0.24 percent lower to 1162.84.
    The Dow Jones industrial average was down 15.75
points, or 0.11 percent, at 13,967.16. The Standard & Poor's 500
Index was down 2.12 points, or 0.14 percent, at 1,518.21.
The Nasdaq Composite Index was down 7.59 points, or 0.24
percent, at 3,189.28.
    The euro fell 0.8 percent to 1.3344 against the
dollar. Against the yen, the dollar was down 0.2 percent
at 93.18.
    Oil prices initially fell after euro zone figures curbed
expectations of accelerating global growth and higher energy
demand. The  stronger-than-expected drop in U.S. jobless claims
last week helped buoy U.S. crude markets, and Brent rebounded to
trade at break-even.
    Brent crude oil fell 4 cents to $117.84 a barrel.
April Brent futures became the front-month contract on Thursday.
U.S. crude rose 63 cents to $97.64.
    U.S. Treasuries yields edged back from 10-month highs on the
euro zone data, helping boost demand for safe-haven debt.
    The benchmark 10-year U.S. Treasury note was up
8/32 in price to yield 2.0312 percent.
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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