* Palladium hits 13-year high, underpinned by South Africa
* World Bank shaves global growth estimate
* Oil climbs on worries over Iraq
By Rodrigo Campos
NEW YORK, June 11 Stocks retreated from recent
highs on Wednesday, pressured by a lower World Bank growth
forecast and a profit warning from Lufthansa, while crude oil
rose on fears of disrupted supply from Iraq.
The euro fell for a fourth straight session against the U.S.
dollar as monetary policy between the European Central Bank and
the Federal Reserve diverges.
The World Bank late on Tuesday cut its global economic
growth forecast for 2014 to 2.8 percent from 3.2 percent due to
the impact of the Ukraine crisis and a harsh U.S. winter. The
Bank was, however, confident economic activity was shifting to a
Stocks on Wall Street were lower in broad selling, with
financials dragged down by a report that Bank of America's
mortgage settlement with the U.S. government reached an impasse.
"The World Bank cutting estimates for global GDP got
everybody's attention in an environment where people are looking
for a reason to take stocks down a little bit," said Art Hogan,
chief market strategist at Wunderlich Securities in New York.
The Dow Jones industrial average fell 94.43 points,
or 0.56 percent, at 16,851.49. The Standard & Poor's 500 Index
was down 5.82 points, or 0.30 percent, at 1,944.97. The
Nasdaq Composite Index was down 3.34 points, or 0.08
percent, at 4,334.66.
Adding to the sour tone, the primary election defeat of
Republican House Majority Leader Eric Cantor further drowned
expectations of Washington passing any significant legislation
before the November elections.
MSCI's global stocks gauge fell 0.2 percent
after earlier flirting with a record high. The FTSEurofirst 300
index lost 0.5 percent, hurt by a profit warning from
German airline Lufthansa.
Japan's Nikkei gained 0.5 percent after MSCI's
decision to keep South Korea and Taiwan in the emerging markets
classification guaranteed Japan will retain its status as the
only developed market in the region.
Benchmark U.S. Treasury yields retreated from a one-month
high hit early in the session, but prices fell after a 10-year
auction. The 10-year note was last down 3/32 in
price to yield 2.646 percent.
The euro hovered near a four-month low versus the dollar,
down 0.12 percent at $1.3531, pressured by a widening
yield gap between euro zone bonds and their peers.
Speculation that the U.S. Federal Reserve could raise
interest rates sooner than previously expected has supported the
dollar and weighed on the euro this week.
The greenback weakened further against the Japanese currency
, falling 0.4 percent to 101.97 yen.
Oil markets watched the unfolding crisis in Iraq as
militants who seized Mosul, the second-biggest city, advanced
into an oil refinery town..
Brent rose 0.3 percent to $109.84 while U.S. crude
was little changed at $104.39.
Palladium retreated from a more than 13-year high but
was still up 0.7 percent, underpinned by a five-month strike in
(Reporting by Rodrigo Campos; additional reporting by Lorenzo
Ligato and Sam Forgione; Editing by Dan Grebler)