* Europe sets Monday deadline for Cyprus bailout deal
* European shares, crude oil slide on weak manufacturing
* Euro struggles on weak euro zone data, Cyprus uncertainty
* 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.
Upbeat U.S. reports on housing, future economic activity and
business conditions in the mid-Atlantic region and improving
Chinese factory output failed to lift investor sentiment.
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
8/32 in price to yield 1.9303 percent. Bund futures
rose 11 ticks to 144.41.
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.
"The uncertainty within Cyprus has investors cycling into
the risk-off trade," said Chad Morganlander, a portfolio manager
at Stifel, Nicolaus & Co in Florham Park, New Jersey.
Gold rallied to its highest in almost a month, with
nervousness over Cyprus fueling sentiment for the safe-haven
metal. Spot gold prices rose $7.10 to $1,612.90 an ounce.
A severe earnings miss by Oracle Corp and a number
of brokerages' cutting their price targets on the tech icon
pulled Nasdaq-listed stocks down. Oracle fell $8.29 to $32.80.
The Dow Jones industrial average was down 65.68
points, or 0.45 percent, at 14,446.05. The Standard & Poor's 500
Index was down 9.49 points, or 0.61 percent, at 1,549.22.
The Nasdaq Composite Index was down 26.46 points, or
0.81 percent, at 3,227.73.
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 in March. 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
Disappointing German data made investors already nervous
about Cyprus's debt crisis wary, though some analysts expected
losses in equity markets to be short-lived.
Autos, sensitive to market sentiment, fell sharply,
as did German synthetic-rubber maker Lanxess, which
joined the list of auto suppliers to take a hit from anemic
European car markets.
The FTSEurofirst 300 index of top European shares
closed down 0.7 percent at 1,190.72.
MSCI's all-country world equity index fell
0.41 percent to 358.20.
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 futures for May delivery fell $1.25 to
settle at $107.47 a barrel. U.S. crude futures for May
settled down $1.05 at $92.45.