* Palladium hits 13-year high, underpinned by South Africa
* World Bank shaves global growth estimate
* Oil climbs on worries over Iraq supply
By Rodrigo Campos
NEW YORK, June 11 A gauge of world stock markets
retreated from recent highs on Wednesday, pressured by a lower
growth forecast from the World Bank and a profit warning from
Lufthansa, while Brent crude rose on fears of disrupted supply
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 were lower in broad selling on Wall Street, with
financials hurt by Bank of America on a report its 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 104.54 points
or 0.62 percent, to 16,841.38, the S&P 500 lost 7.56
points or 0.39 percent, to 1,943.23 and the Nasdaq Composite
dropped 11.06 points or 0.25 percent, to 4,326.94.
Adding to the sour tone, the defeat in a primary election of
House Majority Leader Eric Cantor, a Republican, further
dampened expectations of Washington passing any significant
legislation before the November elections.
MSCI's global stocks gauge fell 0.3 percent
after earlier flirting with a record high. The FTSEurofirst 300
index lost 0.5 percent, weighed 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 indexes 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 benchmark note was last down 1/32 in
price to yield 2.6403 percent.
The euro hovered near a four-month low versus the dollar,
down 0.14 percent on the day at $1.3528, 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 0.3 percent to 102.01 yen.
Oil traders watched the unfolding crisis in Iraq as
militants who seized Mosul, the second-biggest city, advanced
into an oil refinery town..
"In the context of the risks to Baghdad, U.S. oil production
starts to look downright timely; otherwise oil prices could go
much higher," said Richard Hastings, macro strategist at Global
Brent rose 0.4 percent to $109.99 while U.S. crude
was little changed at $104.41.
Palladium inched down from a more than 13-year high,
but was still up 0.8 percent underpinned by a five-month strike
in South Africa and demand from the auto sector.
(Reporting by Rodrigo Campos, additional reporting by Lorenzo
Ligato and Sam Forgione; Editing by Dan Grebler)