* World stocks trim losses slightly; down 0.6 pct
* Oil bounces amid dollar weakness; more data awaited
* Dollar index hits 1-mth lows; euro up 1 pct to dollar
* Treasuries, Bunds ease; 10-yr US yield stays under 3 pct
By Sujata Rao
LONDON, June 2 World stocks extended losses on
Thursday and the dollar fell to a one-month low against major
currencies after a run of dismal economic data pointed to a
faltering recovery in the United States.
Equities pared some early losses, however, as U.S. stock
futures pointed to a higher opening for Wall Street a day after
the biggest one-day fall in almost 10 months for the benchmark
S&P 500 index .SPX. U.S. Treasuries too dipped slightly but
yields stayed near six-month lows hit on Wednesday.
Investors are likely to keep to the sidelines ahead of key
U.S. jobs data due on Friday but their appetite for risk-taking
has already been hit by lacklustre data from both emerging and
U.S. data on Wednesday showed private sector job creation
was way below forecasts in April, while factory growth worldwide
has been slowing, surveys showed earlier.
"The outlook is darkening. It must be worrying for the
global economic authorities. It has cost about $10 trillion
worldwide to create the impression of an economic revival and we
have nothing to show for it," said Jeremy Batstone-Carr,
strategist at Charles Stanley.
He was referring to the enormous amounts of cash stimulus
central banks around the world pumped into their economies to
boost growth after the 2008 financial crisis.
With the U.S. Federal Reserve set to wrap up its $600
billion bond buying programme later this month, signals of more
economic weakness ahead are especially worrying for riskier
assets such as equities, high-yield bonds and emerging markets.
By 1055 GMT, the MSCI index of global equities had fallen
0.6 percent .MIWD00000PUS, slightly trimming earlier losses.
The index fell 1.2 percent on Wednesday, exacerbated by a 2.3
percent tumble in the S&P 500.
Emerging equities shed 1 percent .MSCIEF.
European stocks also fell. The FTSEurofirst 300 .FTEU3
index of top European shares was down 0.7 percent, after a one
percent tumble on Wednesday.
Mining and energy firms were hardest hit as investors
fretted that global commodity demand would weaken. Stocks such
as Antofagasta (ANTO.L) and Xstrata XTA.L fell between 2.4
percent and 2.8 percent
Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and
France's CAC40 .FCHI fell between 1 and 1.3 percent.
Earlier, Japanese shares fell 1.7 percent .N225, hit also
by the political backdrop as Prime Minister Naoto Kan said he
would resign once he gets the nuclear crisis that followed
March's devastating earthquake and tsunami under control.
China closed 1.4 percent down at a four-month low .SSEC.
Markets may get some respite from New York however, as U.S.
stock futures inched higher.
Futures for the S&P 500 SPc1 and Dow Jones DJc1 rose 0.3
percent while Nasdaq 100 NDc1 futures were up 0.45 percent.
Investors are awaiting more U.S. jobs and factory data at 1230
GMT as well as details of sales at chain stores last month.
DOLLAR, BONDS EASE; OIL IN BOUNCE
U.S. non-farm payrolls data, seen as the best barometer of
the world's largest economy, will offer direction to markets on
Friday, with analysts slashing their estimates for job creation.
The median forecast of U.S. payrolls growth in May in a
Reuters poll was revised down to 150,000 from the prior forecast
of 180,000 after Wednesday's poor jobs data [ID:nN01187478].
A weak number will increase pressure on the U.S. dollar,
which fell to a one-month low versus a basket of currencies
.DXY and hovered near a record low to the Swiss franc CHF=
Analysts say disappointing nonfarm payrolls data will fuel
speculation about the need for more monetary stimulus after the
Fed's second quantitative easing round (QE2) ends in June.
"We're in a stage where the dollar will be soft if people
become concerned about weak U.S. data, as QE3 could become a
by-product of that," said Ankita Dudani, currency strategist at
RBS in London.
The euro jumped 1 percent against the dollar to a one-month
high EUR= on optimism that European officials will reach an
agreement on how to help Greece repay its debt.
The growth unease has seen investors pile into safe-haven
U.S. and German bonds, with U.S. 10-year yields falling under 3
percent on Wednesday for the first time since last December.
On Thursday, Treasuries dipped slightly as investors cashed
in on recent gains, pushing the benchmark 10-year yield
US10YT=RR 3.1 basis points higher. But it stayed under 3
percent and is unlikely to rise much in the current environment.
German Bunds too retreated from four-month highs hit after a
strong Spanish bond sale showed some peripheral euro zone states
are riding out the current bout of market stress.
The sale came a day after a three-notch downgrade for Greece
from Moody's, relegating it deep into junk territory.
"We've probably seen the peak (in Bunds) for today. People
have been playing the Greek story and buying bunds on negative
news but how much more bad news can you get from Greece?" said
Charles Berry, a trader at Landesbank Baden-Wuerttemberg.
On commodity markets, metals extended losses, with copper, a
key component in power and construction, hitting a weekly low
before recovering slightly.
But Brent oil bounced 60 cents to $115.3 a barrel and U.S.
futures gained 17 cents, rising above $100. A weak greenback
makes dollar-priced commodities cheaper for buyers holding other
Growth fears are likely to cap crude gains, however. Doubts
about the U.S. recovery have deepened after data last week
showed a 3.5 million-barrel jump in U.S. crude stockpiles,
according to an American Petroleum Industry report.
More inventory data is due at 1500 GMT.
Traders are also pricing in the possibility of an output
rise next week by the OPEC group of oil producing nations.
(Additional reporting by Brian Gorman and Naomi Tajitsu in
London; Editing by Catherine Evans)