* Global shares fall slightly day after setting 6-year high
* Focus on next week's ECB policy meeting
* Dollar slips as ECB action seen weakening euro
(Adds close of European bond, stock markets)
By Herbert Lash
NEW YORK, May 30 Global equity markets edged
slightly lower on Friday as fears that growth expectations are
too high offset mostly solid economic data, while the dollar
eased on the likelihood the European Central Bank will deliver
monetary stimulus next week.
Wall Street fell and a measure of global equities slid after
hitting its highest level in more than six years on Thursday,
though that was still 2 percent below its lifetime high.
"There's nothing I can really point to here that would lead
you to believe that the market is going to move either way,"
said Phil Orlando, chief equity market strategist at Federated
Investors in New York.
U.S. consumer spending fell for the first time in a year in
April, but the decline, which followed two months of solid
gains, did not change expectations for a sharp rebound in
economic growth this quarter.
Other data on Friday showed U.S. consumer sentiment slipped
in May as households worried about income. But a surge in
factory activity in the Midwest confirmed growth was bouncing
back after a weather-induced contraction in the first quarter.
"What we are seeing in the equity markets recently is the
battle between this hope for higher earnings growth and the
growing realization, on the back of a weak first quarter and
very negative corporate guidance, that the growth expectations
are overblown," said Brad McMillan, chief investment officer at
Commonwealth Financial in Waltham, Massachusetts.
MSCI's all-country world equity index fell
0.2 percent, while the FTSEurofirst 300 index of
leading European shares closed down 0.1 percent at 1,377.46.
The Dow Jones industrial average fell 30.02 points,
or 0.18 percent, to 16,668.72. The S&P 500 lost 1.66
points, or 0.09 percent, to 1,918.37 and the Nasdaq Composite
dropped 17.108 points, or 0.4 percent, to 4,230.839.
The dollar eased against other major currencies as traders
tidied up books at month's end and warily awaited potentially
market-moving meetings next week by the ECB.
The dollar, as tracked by the U.S. dollar index of a
half dozen currency pairs, traded softer in a tight range and
was last off 0.16 percent at 80.366.
The euro rose 0.27 percent to $1.3638.
Benchmark U.S. Treasuries yields rose as the investor demand
that stoked May's bond rally faded and on a surprise increase in
U.S. Midwest business activities in March, supporting the view
of a solid economic rebound in the second quarter.
The yield on benchmark 10-year U.S. Treasuries
was last at 2.4679, with the bond price up 6/32.
German bond prices fell, tracking a decline in Treasuries,
after Federal Reserve policymaker Esther George said late on
Thursday that interest rates should be raised more steeply than
many in the market now expect.
George, president of the Kansas City Federal Reserve Bank,
repeated her view that the Fed should start to raise interest
rates shortly after it ends its program of asset purchases.
German 10-year yields, the benchmark for euro
zone borrowing, rose 3 basis points to a day's high of 1.33
Brent crude oil slipped below $110 a barrel but stayed
close to the top of its price range over the last three months,
underpinned by supply worries and evidence of strong oil demand
in the United States, the world's top oil consumer.
Brent crude was down 50 cents at $109.47 a barrel.
U.S. light crude oil slipped 90 cents to $102.68.
(Reporting by Herbert Lash; Additional reporting by Atul
Prakash in London; Editing by Leslie Adler)