* Euribor, euro Libor both fall, seen sinking further
* ECB rate cut expectations stoked by Coeure comments
LONDON/FRANKFURT, June 21 (Reuters) - A growing conviction that the European Central Bank will cut interest rates pushed interbank borrowing costs lower on Thursday, with markets pricing in a slide to record lows.
Three-month Euribor rates, traditionally the main gauge of bank-to-bank lending and a proxy for the direction in which the ECB's refinancing rate is headed, eased to 0.655 percent from 0.657 percent.
The interbank market is awash with cash injected by the ECB, depressing Euribor rates to within 2 basis points of their lows but analysts expect rate cut speculation to drive rates lower before the next policy meeting on July 5.
The euro zone's struggling economy is putting additional stress on countries struggling with a debt crisis that currently threatens Spain's ability to raise funds from the market and is piling pressure on the ECB to act.
"I can't see the world changing sufficiently to derail market belief that the ECB will provide another cut," said Eric Wand, strategist at Lloyds Bank in London.
"Put it this way, if the ECB stays where it is, the market would take it pretty badly. It seems like a cut is in the offing."
The euro-denominated Euribor rates pushed lower after fresh hints from ECB policymakers that the bank's deposit rate could be cut, a move that would open up room for a further drop in market rates. Banks will only lend in the open market if borrowers are prepared to pay more than the ECB.
ECB Executive Board member Benoit Coeure said on Wednesday in an interview with the Financial Times that rate cuts remained an option and would probably be discussed at the next meeting, but that any move would not be a cure-all.
Euribor futures edged higher with contracts dated out to the end of the year rising by around two ticks. Prices imply Euribor falling below the record of 63.4 bps by next month, reaching as low as 51 bps by December.
Three-month euro Libor, fixed by a smaller panel of banks based in London, also fell to set a new low at 0.56479 percent.
Technical analysis by Futurestechs showed the outlook for the March 2013 contract, currently trading at 98.465, was bullish and protected by solid support around 9 9 .34 - a rising trendline between recent lows.
Expectations of a cut to the ECB deposit rate - the amount of interest paid on cash parked overnight at the bank - were reflected in the market for fixed-term Eonia.
Lending at a fixed-term Eonia rate for anything longer than two months requires offering a price below the 25 basis points currently on offer at the ECB. The three-month Eonia rate was last at 21 bps.
Stocks slide after weak manufacturing reports - Denver Post
Commodity prices slumped in early trading after a report said manufacturing in China fell this month. Then, around 10 a.m., the Philadelphia branch of the Federal Reserve reported a sharp contraction in manufacturing in the Northeast. The report, the worst since last August, helped knock the Dow Jones industrial average down about 40 points.
By the afternoon, the Dow had dropped 199 points to 12,624, a loss of 1.6 percent. Alcoa fell the most of the 30 stocks in the average, 3.6 percent. Alcoa lost 32 cents to $8.60, leading a broad fall in commodities and materials companies. Signs of weakness in China are especially troubling since that country's economy has helped drive global economic growth over the past four years.
"The news has been horrible out there," said Uri Landesman, president of Platinum Partners. "The U.S. economy is slowing down. And China's growth is definitely under question."
The Standard & Poor's 500 index lost 22 points to 1,333, a decline of 1.7 percent. The Nasdaq composite fell 55 points, 1.9 percent, to 2,875. All three major indexes lost their gains for the week.
The batch of weak economic reports led a Goldman Sachs analyst to tell clients to place bets against the stock market. The analyst said the S&P 500 index may reach 1,285.
The late-morning blows to investor confidence were just the latest reasons for people to pull money of out stocks. Earlier Thursday, the Labor Department reported that the four-week average of applications for unemployment benefits, a figure closely watched by economists, jumped to the highest level since September. The National Association of Realtors also reported that sales of previously occupied homes dropped 1.5 percent in May.
All this a day after the Federal Reserve slashed its estimates for U.S. economic growth and said it would extend a bond-buying program through the end of the year, disappointing investors who had hoped for bolder steps from the central bank to get the economy going again.
"What's worse is that things are getting weaker without the Fed coming in," said Rex Macey, chief investment officer at Wilmington Trust Investment Advisors. "We had a run-up in the market this month because people had been expecting Fed action. Today, the market is giving it back."
A manufacturing survey for countries that use the European currency also showed a contraction. The reports out of China and Europe helped sink commodity prices. Copper and platinum fell 2 percent. The price of oil dipped below $80 for the first time since October.
Benchmark U.S. crude, on a steady slide since May, hit a low of $79.82 per barrel.
The Philadelphia Fed index pushed Treasury prices up and yields down as traders shifted money into the their favorite hiding spot. The yield on the 10-year note slipped to 1.61 percent, down from 1.63 percent late Wednesday.
Material and energy companies, whose fortunes are closely tied to economic swings, led eight of the 10 industry groups within the S&P 500 index lower. Utilities and telecommunication companies, which are considered defensive investments because of their reliable cash flows and rich dividends, edged higher. Just 15 of the 500 companies in the index rose.
In Europe, auditors calculated that Spain's troubled banks need as much as (EURO)62 billion ($78.76 billion). A Bank of Spain official said this scenario was much less than the (EURO)100 billion that the 17 countries in the euro currency union said they would provide for Spain's banking sector.
Among stocks making big moves:
— ConAgra Foods, a major food maker whose brands include Hebrew National and Chef Boyardee, gained 4 percent, leading the S&P 500. The company's adjusted earnings and sales topped Wall Street's expectations. The stock climbed 95 cents to $25.55.
— Bed Bath & Beyond plunged 15 percent, the most in the S&P 500. The retailer said it expects weaker earnings in the current quarter than analysts expected even though it reported better profits after the market closed Wednesday. Bed Bath & Beyond's stock lost $11.23 to $62.44.
— Red Hat slumped 5 percent. The largest provider of the Linux open source operating system for computers reported weak figures for deferred revenue. Red Hat's stock dropped $3.19 to $53.29.
Stocks Getting Hammered; Can’t Hold Out for QE3 Today - Wall Street Journal
By Paul Vigna
Stocks are down sharply, with the Dow off more than 100 points, after a morning burst of data that painted a darkening picture of the U.S. economy.
The selloff has gained steam amid headlines out of Germany that the high court there may delay adoption of the planned permanent bailout fund. The improvement in Spain’s bond yields isn’t mollifying anybody. It doesn’t help that Goldman Sachs is telling clients to short the S&P 500. The selloff intensified after that note started circulating.
The Dow’s down 148 (1.2%) at 12676, and was down as much as 173; the S&P 500′s off 19 (1.4%) at 1337. Nasdaq Comp’s down 47 (1.6%) at 2883. Energy, materials, and tech are the worst sectors. Utilities and telecom are barely positive.
On the Dow, Intel, H-P, and DuPont are the worst percentage decliners. Only four stocks are up: Merck, Pfizer, Verizon, and Kraft.
Commodities are getting caught up in the slide. Oil’s down 2.4%, gold’s down 2.6%, and silver’s down 4.8%. Treasurys are seeing a bid, with the 10-year yield down to 1.60%. The euro is down nearly 1%, at $1.2568.
The market still believes that the Fed is willing and capable of riding in and saving the day, or at least the stock market. But after the central bank largely sat on its hands yesterday, the hot-stock boys can’t expect a Fed rescue today, even if they could use one.
The past few weeks, headlines like those could be waved off by traders, who were almost blindly believing that the Fed would act at June’s FOMC meeting. But the meeting came and went yesterday, without any firm commitment for another bond-buying program. The next FOMC meeting starts July 31.
You can’t really stoke the QE trade the day after a Fed meeting, so the market may have to fly on its own here for a while.
Given the tenor of the news, it could get ugly.
US STOCKS-Wall St slides on signs of global weakness - Reuters UK
* Manufacturing data weak in China, Europe, U.S.
* Energy and materials slide as oil, copper fall
* Philip Morris latest to foresee lower corporate profits
* Indexes off: Dow 1.1 pct, S&P 1.3 pct, Nasdaq 1.6 pct (Updates to afternoon)
NEW YORK, June 21 (Reuters) - U.S. stocks tumbled on Thursday as recent market gains gave way to brisk selling on signs of manufacturing weakness in the United States and around the globe.
Energy and materials company shares led declines on Wall Street as commodity prices fell. U.S. crude futures slipped below $80 a barrel for the first time since October and copper tumbled almost 3 percent. The S&P energy sector index lost 2.9 percent.
Data on Thursday showed business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed growth by U.S. factories growth. ID:nL1E8HL9AU]
Other U.S. data showed home resales fell in May. Applications for unemployment insurance slipped last week, but the four-week moving average for new claims rose to the highest level since early December.
"Markets are worried about the slowdown, not only in U.S. figures but all around the world," said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida. "The market was extremely overbought coming into this week, and the news gave it an excuse to sell off."
Softening data globally lifted hopes of central bank action to support the economy. The U.S. Federal Reserve announced on Wednesday it would extend one monetary stimulus program and said it was ready to do more to help economic growth if necessary.
The Dow Jones industrial average fell 140.70 points, or 1.10 percent, to 12,683.69. The S&P 500 Index dropped 17.79 points, or 1.31 percent, to 1,337.90. The Nasdaq Composite lost 45.54 points, or 1.55 percent, to 2,884.91.
Semiconductor stocks weighed on the Nasdaq after chipmaker Micron Technology Inc posted a net loss for the fourth straight quarter. Micron lost 6.6 percent to $5.72 and the PHLX semiconductor index dropped 2.7 percent.
Celgene Corp slumped 11.2 percent to $59.66 after the company said it was withdrawing a European application for wider use of its big-selling Revlimid blood cancer drug.
Philip Morris International lost 2.3 percent to $86.51 after forecasting full-year earnings below Wall Street estimates, saying a strong dollar has hurt sales abroad.
Philip Morris' news followed other disappointing outlooks from fellow multinationals PepsiCo and Procter & Gamble .
Onyx Pharmaceuticals Inc surged 44 percent to $64.08 after U.S. drug advisers backed the company's drug for cancer patients. Ligand Pharmaceuticals Inc, which stands to receive royalties from sales of the drug, gained 15.5 percent to $16.80.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)
US STOCKS-Weak global data drags Wall St 1 pct lower - Reuters UK
* Manufacturing data weak in China, Europe, U.S.
* Energy and materials slide as oil, copper fall
* Onyx Pharma jumps after cancer drug gets backing
* Indexes off: Dow 0.7 pct, S&P 1 pct, Nasdaq 1.2 pct (Updates to midday, changes byline)
NEW YORK, June 21 (Reuters) - U.S. stocks fell on Thursday after a raft of data showed an overseas economic slowdown was adding to U.S. weakness.
Energy and materials shares led declines on Wall Street, as U.S. crude futures slipped below $80 a barrel for the first time since October and copper tumbled 2.7 percent. Both the S&P energy sector index and the materials index lost about 2 percent.
Data on Thursday showed business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed U.S. factory growth.
"Selling today is on the idea that the manufacturing sector is weak," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "It's about the whole manufacturing story... reports are weak across the globe."
Other U.S. data showed home resales fell in May and applications for unemployment insurance were higher than expected in the latest week.
Softening data globally has lifted hopes of central bank action to support the economy. On Wednesday, the U.S. Federal Reserve announced it would deliver another round of monetary stimulus and said it was ready to do even more to help an increasingly fragile U.S. economic recovery, but the move was nonetheless a disappointment to markets.
The Dow Jones industrial average fell 92.37 points, or 0.72 percent, to 12,732.02. The S&P 500 Index dropped 13.46 points, or 0.99 percent, to 1,342.23. The Nasdaq Composite lost 36.14 points, or 1.23 percent, to 2,894.31.
Semiconductor stocks weighed on the Nasdaq after chipmaker Micron Technology Inc posted a net loss for the fourth straight quarter. Micron lost 6 percent to $5.75 and the PHLX semiconductor index dropped 2.3 percent.
Celgene Corp slumped 11.6 percent to $59.36 after the company said it was withdrawing a European application for wider use of its big-selling Revlimid blood cancer drug.
Philip Morris International 2 percent to $86.78 after forecasting full-year earnings below Wall Street estimates, saying a strong dollar has hurt sales abroad. Philip Morris disappointing news followed similar outlooks from fellow multinationals PepsiCo and Procter & Gamble.
Onyx Pharmaceuticals Inc surged almost 40 percent after U.S. drug advisers backed the company's drug for cancer patients. Ligand Pharmaceuticals Inc, which stands to receive royalties from sales of the drug, gained 9.1 percent to $15.88. (Reporting by Rodrigo Campos; Editing by Chizu Nomiyama)
GLOBAL MARKETS-Stocks, oil, gold drop on growth worries - Reuters
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US stocks fall on jobless claims - Financial Times
Last updated: June 21, 2012 7:08 pm
Global stocks, oil, gold drop on growth worries - msnbc.com
NEW YORK (Reuters) - Global stocks fell more than 1 percent and Brent crude hit its lowest since December 2010 on Thursday, following data showing Chinese, European and U.S. manufacturing activity had slowed further, just a day after the Federal Reserve extended its monetary stimulus program.
U.S. stocks added to losses after Goldman Sachs recommended shorting the benchmark S&P 500 index, with a target level of 1,285. It was the worst day for all three major U.S. indexes since June 1.
Gold fell and was on track for its biggest decline in more than three months on global economic worries, while the U.S. dollar rose against the euro and yen as the Fed's move disappointed investors who had hoped for a more aggressive policy.
Business activity across the euro zone shrank for a fifth straight month in June, and Chinese manufacturing contracted, while weaker overseas demand slowed U.S. factory growth, surveys showed on Thursday.
The data clouded the outlook for the world economy and compounded fears that Europe's debt crisis, and slower growth in the United States and Asia, would hurt economies worldwide.
"The genesis is Europe and it's starting to flow through everything now. Business has slowed down," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
The Dow Jones industrial average was down 185.16 points, or 1.44 percent, at 12,639.23. The Standard & Poor's 500 Index was down 22.60 points, or 1.67 percent, at 1,333.09. The Nasdaq Composite Index was down 54.48 points, or 1.86 percent, at 2,875.97.
MSCI's global equity index declined 1.6 percent, and European shares ended down 0.5 percent.
On Wednesday, the Fed chose to extend its bond-buying program, dubbed "Operation Twist," rather than implement more quantitative easing as some had hoped.
The U.S. central bank made its decision after lowering forecasts for growth and employment in the world's largest economy in 2012 and 2013. It said it would consider more stimulus measures if the situation worsened.
In Europe, preliminary manufacturing and service sector data across the 17-nation euro area showed the downturn in the region was becoming entrenched as falling new orders and rising unemployment hit business confidence.
The survey data showed that Germany's private sector shrank in June for the second month running, with manufacturing activity hitting a three-year low.
A similar survey of private sector activity in China, compiled by HSBC, found its factory sector had shrunk for an eighth straight month in June, on weaker demand for exports.
Economic growth in the world's most populous nation is widely expected to have slowed for a sixth straight quarter in April through June as the country feels the impact of the euro area debt crisis and property controls weigh on domestic demand.
In U.S. stocks, energy and materials shares led declines, with the S&P energy sector index down 3.2 percent and the materials index down 2.7 percent.
In the oil market, Brent crude fell $2.85 from Wednesday's settlement to $89.84 a barrel, and hit its lowest level since December 2010. U.S. crude traded down $2.95 to $78.50.
The dollar index , a measure of the greenback's performance against a basket of currencies, rose 0.7 percent to 82.154.
Spot gold was down 2 percent at $1,574.40 an ounce.
"The manufacturing data was deflationary. Gold selling accelerated following yesterday's Fed announcement, which was modestly disappointing for those traders who had bought gold in anticipation of more help from the Fed," said Mark Luschini, chief investment strategist of Janney Montgomery Scott, a broker-dealer with $54 billion in assets.
SPANISH BOND YIELDS DOWN
Spanish government bond yields fell sharply as Madrid tapped the markets with a sale of medium-term debt, although at an increased cost.
Spain sold 2.2 billion euros of two-, three- and five-year bonds, slightly more than the relatively small stated target amount, but it relied on its domestic banks to absorb the issuance.
Ten-year Spanish government bond yields fell 15 basis points on Thursday to 6.62 percent, having risen to almost 7.30 percent last week.
In the U.S., bond yields were down as well. Benchmark 10-year Treasuries were last up 13/32 in price to yield 1.61 percent, down from 1.65 percent late on Wednesday.
(Additional reporting by Richard Hubbard, Ana Nicolaci da Costa and Kristen Donovan in London and Frank Tang and Chuck Mikolajczak in New York; Editing by Bernadette Baum)
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