* Report German banks face fines also weighs
* Dollar slips versus yen on equity sentiment
* Crude oil falls as geopolitical tensions ease
(Adds opening of U.S. markets, changes byline, dateline;
By Herbert Lash
NEW YORK, July 8 The dollar eased and global
equity markets fell on Tuesday as investors stepped back ahead
of second-quarter earnings reports and after successive record
highs last week for several major stock indices.
Media reports of new U.S. fines for banks and dimming
prospects that the European Central Bank will launch an asset-
purchase program weighed on sentiment in Europe, as did German
imports and exports that dropped more than expected in May.
The dollar fell against the Japanese yen as long-dated
Treasuries yields dropped for a second day, with investors wary
of riskier assets as the U.S. earnings season began.
Safety buying of long-dated Treasuries is seen limiting
dollar strength, at least in the near term. Three straight days
of record closing highs for the S&P 500, the Dow industrials and
MSCI's all-country world index tamped down investor enthusiasm.
"We've seen a bit of risk aversion in the market and the
tendency for yields to fall in the U.S. and the dollar to fall
in sync with it," said Sebastien Galy, senior foreign exchange
analyst at Societe Generale in New York. "It's driven by
MSCI's ACWI fell 0.6 percent to 429.22,
while the pan-European FTSEurofirst 300 index was down
1.0 percent at 1,368.08 points
The Dow Jones industrial average fell 112.03 points,
or 0.66 percent, to 16,912.18. The S&P 500 lost 13.57
points, or 0.69 percent, to 1,964.08 and the Nasdaq Composite
dropped 63.206 points, or 1.42 percent, to 4,388.324.
"It's all about earnings," Brad McMillan, chief investment
officer for Commonwealth Financial in Waltham, Massachusetts
said. "It's just people pulling back, pulling their heads in a
little bit and saying 'Wait a minute, maybe we got a little
ahead of ourselves, let's see what the news actually says.'"
European equity indexes fell for a third consecutive day
after reports that Germany's largest lenders were negotiating a
settlement with U.S. authorities over their dealings with
countries blacklisted by Washington. The talks follow a huge
fine for French lender BNP Paribas.
The ECB has made unprecedented policy moves in recent months
to stimulate bank lending and revive the euro zone economy.
But late on Monday ECB Executive Board member Sabine
Lautenschlaeger showed the strength of opposition in some
quarters to a program of asset purchases, which she said should
be a last resort.
The dollar fell 0.27 percent against the yen to
101.54 yen. The euro rose 0.05 percent to $1.3611.
The 10-year U.S. Treasury note rose 13/32 in
price to yield 2.5684 percent.
Oil prices extended their recent decline as events in Iraq
and Ukraine have so far not led to serious disruption in flows.
Brent dipped 96 cents to $109.28 a barrel and U.S. oil
lost 1 cent to $103.52 a barrel.
(Additional reporting by John Geddie in London, Reporting by
Herbert Lash; Editing by Meredith Mazzilli)