* Russia stocks tumble anew after new sanctions
* Wall Street falls in early trade on weak housing data;
* Dollar pauses for breath after strongest week since March
(Updates with U.S. market open)
By Angela Moon
NEW YORK, July 28 World stock markets fell on
Monday as new European sanctions against Moscow chilled the
already frosty relationship with Russia while the dollar hovered
near six-month highs against a basket of major currencies.
U.S. stocks opened lower after data showed contracts to buy
previously-owned U.S. homes fell unexpectedly in June, casting a
cloud over the housing market recovery.
U.S. Treasuries yields fell to session lows with the
benchmark 10-year notes yield at 2.47 percent.
"Housing has lost some of its mojo," said Ryan Sweet, senior
economist at Moody's Analytics at West Chester, Pennsylvania.
"If housing doesn't re-accelerate, the economy won't grow
faster. Our economy doesn't do well if housing doesn't do well.
The Fed will likely be cautious in its outlook on housing."
Investors were reluctant to make big bets ahead of data and
events this week that include closely watched jobs and GDP data,
a Federal Reserve meeting and $93 billion in new coupon-bearing
MSCI's All-World Index was down 0.3 percent.
On Wall Street, the Dow Jones industrial average fell
76.65 points or 0.45 percent, to 16,883.92. The S&P 500
lost 10.59 points or 0.54 percent, to 1,967.75 and the Nasdaq
Composite dropped 34.55 points or 0.78 percent, to
Russian markets tumbled for a third straight session after
the European Union reached an outline agreement on its first
economic sanctions on Russia since the downing of a Malaysian
airliner. German finance minister Wolfgang Schaeuble said the
"top priority" was peace rather than economic interests.
Russia warned the moves would hamper cooperation and
undermine the fight against terrorism, although Foreign Minister
Sergei Lavrov said that Moscow would not impose tit-for-tat
Moscow's dollar-denominated RTS index slumped 2.5
percent in response, its rouble-traded peer MICEX fell
1.8 percent and the rouble dropped over half a percent against
both the dollar and the euro.
"We have seen Germany stepping up rhetoric on tougher
sanctions on Russia," said Vasileios Gkionakis, Global Head of
FX Strategy for UniCredit in London. "Saying stability and peace
is the top priority rather than economic interests are strong
The dollar index was marginally lower at 81.000,
after it peaked at 81.084 on Friday, a high not seen since early
February. So far this month, it has rallied around 1.6 percent,
on track for its best monthly gain since January.
Brent crude slipped towards $107 a barrel as ample supply in
the Atlantic basin and weak demand in Europe and Asia outweighed
worries over Ukraine and the Middle East.
September Brent was down $1.20 at $107.19 a barrel
while U.S. crude futures for September dropped 80 cents
to $101.29, after ending last week 1 percent lower.
(Additional reporting by Richard Leong in New York; Editing by