* Europe sets Monday deadline for Cyprus bailout deal
* European shares, crude oil slide on weak manufacturing
* Treasury prices gain on safety bid as Cyprus in focus
By Herbert Lash
NEW YORK, March 21 Global equity markets, crude
oil and the euro fell on Thursday on fears of a potential
banking collapse in Cyprus and signs the economic downturn in
Europe is deepening.
Several upbeat U.S. economic reports on housing, future
economic activity and business conditions in the mid-Atlantic
region and improving Chinese factory output failed to lift
Prices of U.S. Treasuries and German Bund futures rose as
investors tried to gauge whether Cyprus would reach a deal to
enable it to avoid default and a possible financial meltdown.
The benchmark 10-year U.S. Treasury note was up
6/32 in price to yield 1.9372 percent.
The European Central Bank gave Cyprus until Monday to raise
billions of euros to clinch an international bailout or face
losing emergency funds for its banks and inevitable collapse.
"There's a little bit of wait and see on Cyprus," said Lou
Brien, market strategist at DRW Trading in Chicago. "If they
can't come up with anything and the odds of Cyprus leaving the
euro zone rise, then I think that will create a flight to safety
Gold rallied to its highest in almost a month, with
nervousness over Cyprus fueling sentiment for the safe-haven
metal. Spot gold prices rose $6.85 to $1,612.70 an ounce.
A severe miss by Oracle Corp and a number of
brokerages' cutting of their price targets on the tech icon
pulled Nasdaq-listed stocks down. Oracle fell $8.71 to $32.64.
But the broad U.S. stock market pared losses, as underlying
strength of a recent rally once again seemed to be prevailing.
"There is definitely more momentum left to the upside. In
many days, we see the market start off lower but we manage to
cut that by the end of the day. That's market strength," said
Frank Gretz, chief technical analyst at Shields & Co in New
The Dow Jones industrial average was down 35.75
points, or 0.25 percent, at 14,475.98. The Standard & Poor's 500
Index was down 4.76 points, or 0.31 percent, at 1,553.95.
The Nasdaq Composite Index was down 20.38 points, or
0.63 percent, at 3,233.81.
European shares fell after Germany, the region's leading
economy, showed signs of fatigue and French businesses turned in
their worst performance in four years. France, the euro zone's
second-biggest economy, likely fell into a recession.
The decline on Wall Street came even as more data showed a
slow but steady U.S. economic recovery. U.S. home resales hit a
three-year high and prices jumped in February, while factory
activity in the U.S. mid-Atlantic region grew in March after
contracting for two months in a row.
Another report showed the Conference Board's Leading
Economic Index, a gauge of future U.S. economic activity, rose
for a third straight month in February.
The euro zone's economic woes occurred even before Cyprus'
bailout troubles took center stage.
"Maybe we were expecting it in France but the weakness in
Germany was a surprise," Antonio Garcia Pascual, chief southern
European economist at Barclays, said of the two European
The FTSEurofirst 300 index of top European shares
fell 0.53 percent to 1,192.56.
MSCI's all-country world equity index fell
0.2 percent to 358.87.
Crude oil was pushed lower by fears of further turmoil in
the euro zone and by manufacturing data showing a deepening
downturn in the currency bloc.
Brent crude for May delivery fell 80 cents to
$107.92 a barrel. U.S. crude for May was at $93.19, down