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* Wall Street falls after talks on fiscal cliff hit wall * European shares, euro fall as U.S. budget talks falter * Gold near four-month low, oil down * Dollar and German government bonds up as safe havens climb By Herbert Lash NEW YORK, Dec 21 (Reuters) - Global stock markets fell on Friday, pushed lower by a drop on Wall Street, while the euro and oil prices slipped as a new setback in talks to avert a U.S. fiscal crisis and evidence of Europe's ongoing economic woes weighed on investors. A proposal from Republican leader John Boehner to avoid the so-called fiscal cliff failed to get support from his party on Thursday, casting fresh uncertainty over negotiations to avoid tax hikes and spending cuts in January that could push the U.S. economy back into recession. The Dow and broad S&P 500 indexes fell about 1 percent while the Nasdaq fell about 1.4 percent after U.S. markets opened, then retested lows after a poor reading of consumer confidence. Thomson Reuters/University of Michigan Surveys of Consumers' final December consumer sentiment index fell to 72.9 from 74.5 in the preliminary report. Economists in a Reuters survey expected a final December reading of 74.7. Adding to anxiety were weaker-than-expected data from key corners of Europe, as German consumer morale dropped to its lowest in more than a year, Britain revised growth figures lower and Sweden slashed its economic forecasts. The euro fell 0.43 percent to $1.3184. The combined worries prompted widespread selling in most major stock markets and led investors to safe-haven assets. The dollar and yen and U.S. and German Government bonds all rose as declines on equity markets in London, Paris and Frankfurt compounded tumbles in Asia. MSCI's all-country global equity index fell 0.7 percent to 340.24. The Dow Jones industrial average was down 125.89 points, or 0.95 percent, at 13,185.83. The Standard & Poor's 500 Index was down 15.66 points, or 1.08 percent, at 1,428.03. The Nasdaq Composite Index was down 43.05 points, or 1.41 percent, at 3,007.34. The FTSEurofirst 300 of leading European shares fell 0.22 percent to 1140.26. At a news conference, Boehner said it is up to President Barack Obama and fellow Democrats in Congress to reach a solution to the fiscal cliff. Bickering U.S. politicians have only 10 days left to resolve their differences. Most observers are still assuming the two sides will avert disaster but tensions are likely to intensify over the normally quiet holiday period as the deadline looms. "The markets are likely to interpret this as signaling even tougher negotiations in coming days," Mohamed El-Erian, chief executive of bond giant PIMCO, told Reuters. Oil also caught up in the U.S. disappointment. Brent crude oil fell $1.10 to $109.10 per barrel, while U.S. oil futures <CLc1) fell $1.45 to $88.68. The benchmark 10-year U.S. Treasury note rose 16/32 in price to yield 1.7423 percent.