August 26, 2010 / 7:26 PM / 9 years ago

EMERGING MARKETS-Latin American stocks slip on U.S. GDP fears

* Bounce from drop in U.S. jobless claims fades

* Investors brace for U.S. Q2 GDP revision

* Bovespa dips 1.35 pct, Mexico’s IPC 0.62 pct

(Updates with late numbers)

MEXICO CITY/SAO PAULO, Aug 26 (Reuters) - Latin American stocks fell in afternoon trading on Thursday as investors braced themselves for Friday data that could fuel fears of a sluggish U.S. economy.

The MSCI Latin American stocks index .MILA00000PUS reversed morning gains to slip 0.44 percent in the afternoon, on track to notch a seventh straight session of losses. That would be the index’s longest run of drops since July 2009.

“The market is getting ready for the U.S. GDP tomorrow,” said Sidney Lee, a fund manager at Gradual Investimentos in Sao Paulo. “There’s a consensus that the number is going to be revised lower, and it could come much worse.”

The U.S. economy — the world’s biggest, and a major influence on Latin America — expanded 2.4 percent in the second quarter, according to an early gross domestic product reading in July. [ID:nN29111411]

But the median of 75 forecasts in a Reuters poll puts the revised figured at 1.4 percent USGDPR=ECI.

Those concerns outweighed morning news of a steeper-than-expected drop in U.S. initial weekly claims for unemployment benefits, which helped bring up equities around the world. [ID:nN26186848].

Key U.S. indexes also turned negative in the afternoon, as worries about the strength of recovery there returned.

Brazil's benchmark Bovespa index .BVSP slipped 1.35 percent in the afternoon, for a possible sixth straight down session.

Shares of state-controlled energy giant Petrobras (PETR4.SA) gave up morning gains to fall 0.88 percent in the afternoon.

The stock has gotten battered this year as uncertainties swirl around a massive capitalization plan.

But Brazilian regulators told Reuters the government and the company will likely agree on details of a plan to inject funds into the company on or after Aug. 30. [ID:nSPG003023]

Banks also slid. Itau Unibanco (ITUB4.SA), Latin America’s largest private sector bank by assets, lost 2.32 percent, Bradesco (BBDC4.SA) dropped 1.5 percent and Banco do Brasil (BBAS3.SA) retreated 2.93 percent.

Shares of mining giant Vale VALE5.SA, the world’s largest producer of iron ore, declined 0.59 percent.

Mexico's IPC stock index .MXX dipped 0.62 percent. The index notched modest gains in the previous session as shares of Grupo Carso, a conglomerate controlled by billionaire Carlos Slim, jumped to a record high on spin off plans.

The company (GCARSOA1.MX) added to those gains on Thursday, up 0.75 percent.

Telecom America Movil (AMXL.MX) fell 0.62 percent, and leading retailer Walmex WALMEXV.MX gave up 0.93 percent.

In Chile, the blue-chip IPSA index .IPSA inched down 0.06 percent as forestry and paper company CMPC CAR.SN slid 1.63 percent. (Reporting by Luciana Lopez in Sao Paulo and Caroline Stauffer in Mexico City; Editing by Eric Walsh)

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