GLOBAL MARKETS-Global stocks pressured as economic gloom mounts
Reuters* Global stocks down as growth fears feed investor angst
* Dollar falls on weaker-than-expected August jobs report
* Bond gains capped as weak U.S. labor data was priced in
* Crude falls as weaker demand offsets fall in inventories
(Recasts with U.S. markets, adds byline; changes dateline;previous LONDON)
By Herbert Lash
NEW YORK (Reuters) - Global stocks fell Fridayafter a surprisingly weak U.S. jobs report raised fears ofgrowing economic weakness worldwide, leading investors to cuttheir appetite for riskier assets and buy safe-haven debt.
Evidence of slowing global demand helped push crude oildown to a fresh five-month low and hammered industrial metalsafter a hefty rise in copper inventories triggered a sell-off.
Copper and aluminum both tumbled to seven-month lows, whilelead and tin prices shed about 5 percent. Crude's fall to under$106 a barrel extended the week's losses to 8 percent.
News that the U.S. unemployment rate soared to nearly afive-year high last month of 6.1 percent from 5.7 percent inJuly rattled equity investors and lured them into bonds.
The U.S. dollar fell against the euro for the first time inseven sessions after a government report showed the U.S.economy lost more jobs than expected in August.
European stocks fell more than 2 percent, capping theirbiggest weekly decline in more than five years, and U.S. stocksfell for a fifth straight day, although they pared bigger early-session losses.
Investors shrugged off continued oil production problems inthe United States in the wake of Hurricane Gustav, which leftsome 25 percent of U.S. crude production and 10 percent of itsrefining idled and in slow recovery.
"The economy in the United States and Europe is turning badand people realize that the growth in the economies of China,India and Brazil will not be enough to offset what looks like aworld economic contraction," said Kyle Cooper, director ofresearch at IAF Advisors in Houston.
Qualcomm was the top drag on Nasdaq, followed byBlackBerry maker Research In Motion . Investorsalso sold-off shares of oil companies on signs a globaleconomic slowdown would reduce the demand for energy.
Qualcomm fell nearly 2 percent, Research in Motion slippedmore than 3 percent and Exxon Mobil shed 1.4 percent.
Before 1 p.m., the Dow Jones industrial average wasdown 12.05 points, or 0.11 percent, at 11,176.18. The Standard& Poor's 500 Index fell 4.29 points, or 0.35 percent, at1,232.54. The Nasdaq Composite Index shed 12.81 points,or 0.57 percent, at 2,246.23.
Banks and energy stocks in Europe were among thetop-weighted losers.
The FTSEurofirst 300 index of top European shareslost 2.2 percent at 1,125.48 points.
Nokia fell nearly 10 percent after the world'stop mobile phone maker warned it would lose market share thisquarter as it refused to participate in a price war waged bysome rivals to combat weak economies.
Banks, miners and energy shares were among top-weightedlosers on the index, with commodity stocks also facing pressurefrom a sharp decline in prices of metals and crude.
UBS AG and Barclays slipped 3.6 percentpercent each, Royal Bank of Scotland dropped 3.5percent and HBOS lost 2.5 percent.
Among miners, Kazakhmys dropped 8.2 percent,Antofagasta shed 7 percent, Xstrata slipped5.6 percent and Anglo American fell 5.2 percent.
"You are looking at a weak economic scenario, the financialliquidity crisis is not solved and you are looking at weakearnings reports," said Philip Isherwood, strategist atDresdner Kleinwort.
Fears over the U.S. labor market and the general health ofthe U.S. economy eroded some support for the dollar.
The dollar rose against major currencies, with the U.S.Dollar Index up 0.08 percent to 78.941. Against the yen,the dollar fell 0.46 percent to 107.08.
The euro fell 0.06 percent at $1.4241.Dollar:
Euro zone government bonds rallied, with 10-year notesyielding below 4 percent to their lowest level sincemid-April.
U.S. Treasury debt prices shed early gains to turn lower asstocks pared losses.
U.S. Treasury debt prices were mixed.
The benchmark 10-year U.S. Treasury note fell3/32 to yield 3.63 percent. The 30-year U.S. Treasury bond rose 3/32 to yield 4.26 percent.
Oil prices fell more than $2 on flagging U.S. demand andfrom other consumer nations.
U.S. light sweet crude oil fell $2.10 to $105.79 abarrel. Spot gold prices fell 5 cents to $794.50 anounce.
Gold rose as the dollar declined on the U.S. jobs report.
World stocks extended losses to fresh two-year lows whilesave-haven government bonds rallied on Friday after asurprisingly weak U.S. jobs report deepened worries about thehealth of the global economy.
The U.S. unemployment rate shot up to 6.1 percent inAugust, its highest in nearly five years, while the economylost a higher-than-expected 84,000 jobs last month. (Reporting by Ellis Mnyandu, Wanfeng Zhou, John Parry and Carole Vaporean in New York and Atul Prakash, Matthew Robinsonand George Matlock in London) (Writing by Herbert Lash)