GLOBAL MARKETS-Shares, euro slip as euro zone recession deepens

Thu Feb 14, 2013 11:18am EST

* German GDP drop worst since 2009, France also contracts
    * U.S., European indexes pare losses to trade near
break-even
    * 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.
    U.S. stocks pared initial losses to trade near break-even,
with news that Warren Buffett's Berkshire Hathaway and
3G Capital will pay $23.2 billion in cash to buy food maker H.J.
Heinz, helping 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
0.1 percent to 356.37, and the FTSEurofirst 300 index 
of top European companies slipped 0.01 percent to 1165.50.
    The Dow Jones industrial average was up 1.85 points,
or 0.01 percent, at 13,984.76. The Standard & Poor's 500 Index
 was up 0.27 points, or 0.02 percent, at 1,520.60. The
Nasdaq Composite Index was down 2.00 points, or 0.06
percent, at 3,194.88. 
    The yen rallied to session highs versus the dollar as
investors pared bearish bets on the Japanese currency. The
dollar fell as low as 92.92 yen and last traded at 93.01,
down 0.4 percent on the day.
    The euro fell 0.86 percent to 1.3337 against the
dollar. 
    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 8 cents to $117.80 a barrel.
April Brent futures became the front-month contract on Thursday.
U.S. crude rose 40 cents to $97.41.
    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
4/32 in price to yield 2.0416 percent.