5 Min Read
* Investors look to government, central banks for help
* Fed's Bernanke pledges more aid but mum on details
* Markets await Obama's jobs plan, doubts over feasibility
* ECB rates unchanged, Trichet sees downside growth risks (Updates with markets close)
By Richard Leong
NEW YORK, Sept 8 (Reuters) - Wall Street stocks fell on Thursday on disappointment that a speech by the Federal Reserve chief lacked details on plans to spur economic growth, while the euro declined on fears the euro zone debt crisis is worsening with Greece failing to meet fiscal targets.
Safe havens were still in favor with investors, as gold prices rebounded after a two-day fall and German and U.S. government bond yields edged closer to their historic lows.
Fed Chairman Ben Bernanke said the U.S. central bank "will do all it can" to boost economic growth and reduce unemployment, but he did not disclose what monetary tools the Fed might use. For details, see [ID:nW1E7IR02M]
"The markets are going to be disappointed in this and concerned that the Fed is only acknowledging the problems without offering any real solutions," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Traders shifted their focus to U.S. President Barack Obama's televised speech to Congress at 7 p.m. EDT (2300 GMT). He is expected to announce a $300 billion plan that includes tax cuts for middle-class families and businesses and new spending to repair roads, bridges and other infrastructure.[nN1E786157]
"Everyone's waiting for the president to give a real, good, solid speech tonight. He's got to deliver something strong and positive," said Michael Cullen, head bond trader at Wall Street Access in New York.
Later this week, G7 finance ministers and central bankers will convene in Marseilles, France, with markets expecting them to pledge support to help a struggling global economy. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic-interest rate outlook: link.reuters.com/pej23s Graphic - U.S. jobless claims: r.reuters.com/dym63s U.S. exports and the dollar: r.reuters.com/xan63s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
A U.S. government report showing an increase in weekly jobless claims and remarks by European Central Bank President Jean-Claude Trichet about downside risks to the euro zone's economy fueled fears that both the United States and Europe are at risk of slipping into recession.
Those worries briefly pushed equities markets into negative territory before some buying emerged before Bernanke's speech.
After a choppy trading session, the Dow Jones industrial average .DJI ended down 119.05 points, or 1.04 percent, at 11,295.81. The Standard & Poor's 500 Index .SPX finished down 12.72 points, or 1.06 percent, at 1,185.90. The Nasdaq Composite Index .IXIC closed down 19.80 points, or 0.78 percent, at 2,529.14.
Losses on Wall Street knocked MSCI's world stock index .MIWD00000PUS down 0.6 percent on the day. The MSCI index has recovered a tad from its August correction -- the worst monthly loss since 2008 -- but is still 16 percent below the 2011 highs hit in May.
Earlier, Tokyo's Nikkei .N225 finished up 0.3 percent, while the FTSEurofirst 300 index .FTEU3 of top European shares ended up 0.9 percent after erasing early gains on the ECB's decision to leave key rates steady.
In the wake of Trichet's cautious economic outlook and the chances of no more rate hikes in the foreseeable future, the euro fell to a two-month low against the dollar. It ended down 1.5 percent at 1.3887 after hitting a session low of $1.3875 on the EBS trading platform. EUR=EBS
In the bond market, benchmark 10-year German Bund yields EU10YT=TWEB touched a historic low of 1.82 percent while U.S. 10-year Treasuries US10YT=RR were up 17/32 in price, their yield at 1.9822 percent, not far above a 60-year low of 1.9080 percent set on Tuesday.
Spot gold prices XAU= jumped almost $50 or 3 percent to $1,865 an ounce. [GOL/]
Financial markets plan to observe the 10th anniversary of the Sept. 11th terror attacks on Friday. NYSE Euronext will host events at its New York and European exchanges, while the CME Group will hold four voluntary moments of silence. (Additional reporting by Ed Krudy, Emily Flitter, Wangfeng Zhou and Barani Krishnan; Editing by Dan Grebler)