* Gold hits record high on renewed safe-haven bid
* Global stocks slide as dollar's slump buoys commodities
* Traders speculate Japanese authorities won't intervene
* Bank funding concerns, recession fears still a concern
By Herbert Lash
NEW YORK, Aug 19 Gold set a fresh record high
and equity markets slid anew on Friday as lingering fears about
Europe's debt crisis and a possible slide by major economies
into recession kept the bid for safe-haven securities alive.
Commodity prices rebounded after the U.S. dollar plunged to
a record low against the yen on speculation Japanese
authorities will not intervene often to halt the yen's surge.
Gold prices early in the session rallied almost 3 percent
as investors sought refuge from Thursday's hefty losses in
stocks, when the yield on 10-year U.S. government bonds slipped
below 2 percent for the first time in 60 years.
Spot gold XAU= jumped to a record $1,877 an ounce and was
last trading near $1,846.50, still on track for its biggest
one-month rise in nearly 12 years in August.
U.S. stocks see-sawed and then turned lower while European
stocks closed down on recession fears and concerns about
regional bank funding.
Friday was "a continuation of the same two themes: concern
over the prospects for world growth and concerns over the
stability of the euro zone," said Alan Brown, chief investment
officer at Schroders, which manages $329 billon in assets, in a
note to investors.
U.S. stocks edged down on Hewlett-Packard (HPQ.N)'s weaker
outlook and corporate shake-up added to a wealth of uncertainty
The major U.S. equity indices swung between positive and
negative before pushing lower in the afternoon, reflecting the
volatility that has rocked markets in past weeks.
"What I'm seeing right now is a basically a crisis of
confidence, moreso than an economic crisis or financial crisis
necessarily at this stage," said Natalie Trunow, chief
investment officer of equities at Calvert Investment Management
in Bethesda, Maryland, which manages about $14.8 billion.
David Mann, regional head of research for the Americas at
Standard Chartered in New York, said: "We shouldn't read too
much into today's moves. The market is very choppy and
On Wall Street, the Dow Jones industrial average .DJI was
down 96.19 points, or 0.88 percent, at 10,894.39. The Standard
& Poor's 500 Index .SPX was down 8.25 points, or 0.72
percent, at 1,132.40. The Nasdaq Composite Index .IXIC was
down 17.87 points, or 0.75 percent, at 2,362.56.
European shares flirted with two-year lows.
The FTSEurofirst 300 .FTEU3 index of top European shares
closed down 1.7 percent lower at 909.79. MSCI's all-country
world stock index .MIWD00000PUS was off 1.4 percent, while
emerging markets stocks .MSCIEF fell 2.6 percent.
The dollar fell as low as 75.941 yen JPY=EBS on trading
platform EBS. It last traded at 76.501 yen, down 0.1 percent.
Currency traders were emboldened by a Wall Street Journal
report citing Japan's top currency official as saying Japanese
authorities do not plan to intervene in the market often. For
details see: [ID:nN1E77I0L5]
The dollar's slump turned commodity markets, where crude
oil prices rose about 2 percent at one point. ICE Brent October
crude LCOc1 rose $1.31 to $108.30 a barrel. U.S. crude oil
CLc1 fell 12 cents to $82.26 per barrel.
U.S. Treasury yields inched up from a low of 1.97 percent
on Thursday as some investors took profits. [ID:nN1E77I09T]
The benchmark 10-year U.S. Treasury note US10YT=RR was
down 6/32 in price to yield 2.09 percent.
Yields have dropped almost a full percentage point on the
10-year note in August as disappointing economic data, the
Federal Reserve's low interest rate policy and jitters over
rising bank funding costs drove investors to safe-haven bonds.
"At the moment the market is just looking for relative safe
havens," said Mitsui Precious Metals analyst David Jollie. "You
can see that in the sell-offs across equity markets overnight.
The strength of gold is the other side of the coin from that."
The U.S. dollar index .DXY slipped 0.4 percent to 73.974.
The euro EUR= was up 0.6 percent at $1.4381.
(Reporting by Rodrigo Campos, Gertrude Chavez-Dreyfuss and
Karen Brettell in New York; Barbara Lewis and Jan Harvey in
London; Harro ten Wolde in Frankfurt; Writing by Herbert Lash;
Editing by Dan Grebler)