Oil, world stocks tumble on signs of dismal economy (Reuters)

NEW YORK (Reuters)-oil prices plunged, falling global stocks and euro shred more than 1.0 percent Thursday after the news of disappointing private sector activities in Europe and China, coupled with an increase in unemployment claims of the United States, sent a shiver through the global financial markets.

Exacerbating fears of slower growth were expected from the International Energy Agency to release 60 million barrels of oil from the strategic inventories.

"It could be a signal to their overall level of concern about slower global economy," said Omer Esiner, senior market analyst at Commonwealth Foreign Exchange in Washington.

Further diminished and European equities and debt prices of Government on both sides of the Atlantic extended gains after initial claims for State unemployment benefits rose more than expected last week.

Gold fell almost 2.0 percent to hit lowest levels in nearly and the euro hit an all-time low against the Swiss franc as anxiety for Greece and a slowing U.S. economy dampened the investors ' risk appetite and encouraged an offer for security.

The euro fell 1.3% to $ 1,451, the lowest level in about a week and also hit a new record low at 1.1873.

"The claims (jobless U.S.) just added fuel to the fire here ... you two months now stuck in this range and they just won't budge. That is certainly a disappointment, "said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

Compounding the worry, the private sector in the euro zone grew only modestly, and would be reduced without the support of Germany and France, while the sector of China barely extended even as inflation eased, purchasing managers ' indices (PMI) has shown.

The data comes a day after the Federal Reserve of the United States said that the pace of recovery of the United States was proceeding more slowly than it had expected, but no new aid for its economy, once the purchase programme of its link expires this month pledged.

"Bernanke's Outlook cautious (President Ben) and persistent turmoil for the American economy that could linger until the end of the year, including concerns about Greece, hit market sentiment," said David Watt, senior currency strategist at RBC Capital Markets in Toronto.

World stocks as measured by the MSCI World equity index of all countries were down 1.1 percent, leaving the index plate so far this year.

On Wall Street, the Dow Jones industrial average fell 166.76 points, or 1.38 percent, to 11, 942.91. The stock index & Poor Standard of 18.01 was down 500 points or 1.40%, to 1, 269.13. The Nasdaq Composite Index dropped 35.95 points or 1.35 percent, to 2, 633.24.

Brent crude oil Futures and United States extended losses in volatile trading after the Labor Department report showed initial claims rose 9,000 to a seasonally adjusted 429.000. Economists had expected claims to come in at 415,000.

In London, ICE Brent crude oil for August delivery fell $ 109.06 $ 5.15 per barrel. The New York Mercantile Exchange, the August contract fell $ 4.08 91.33 per barrel.

Gold spot fell from 1.99% to a minimum of 1 session, $ 518.40 per ounce. Prices later barred a little $ 1, 524.46.

Treasury of the United States cut short an early advance after the IEA announced that it would release of strategic crude reserves.

The United States Treasury note of 10-year benchmark price was up to cede 2.92% 16/32.

Bunds had already earned after signs of a slowdown in growth in the euro area has raised fears about the ability of Greece and other countries to combat the debt crisis.

Bund Futures rallied to a session high of 35 126.56, the ticks of the day, pushing yields of 10 years to 2.92%.

(Additional reporting by Steven c. Johnson and Robert Gibbons in New York; Lucia Mutikani in Washington; Jonathan cable, Kirsten Donovan and Brian Gorman in London; Written by Herbert Lash)

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European stocks, euro fall on economic concerns (AFP)

London (AFP)-European shares fell Thursday after the Federal Reserve has downgraded its growth forecast, while downbeat U.S. manufacturing data raised concern about Chinese economy Asian powerhouse.

The euro fell against the dollar on concerns over the Greek debt crisis.

Around noon, in London, the FTSE 100 to 0.90% benchmark shed 5, 721.18 points. The Frankfurt DAX 30 slid 7% to 1.06, 200.99 points and in Paris the CAC 40 dipped 1.21% at 3, 824.47.

The dollar won support after the Fed, meanwhile, marked the end of its program of buying bonds this month and indicated further credit easing was unlikely. The euro fell to $ 1.4254 in London deals from $ 1.4349 late in New York on Wednesday.

Wall Street sank after the Federal Reserve left in neutral monetary policy on Wednesday and reduced its growth estimates, while the U.S. Fed Chairman Ben Bernanke warned of economic turmoil that may persist for longer than expected.

"The weakness of the financial sector, problems in the housing sector, budgets and low-turbulence-some of these may be stronger or more persistent than we thought," Bernanke said.

Also warned of the potential risks to the global economy from the sovereign debt crisis in Greece.

Federal Open Market Committee (FOMC) has also confirmed that the second round of the Bank's purchase of bonds will end this month as the current problems in the economy were temporary and would not need more stimulus.

Markets had been waiting to see what kind of new policies the Fed might continue after the end of June, when it expects to conclude his $ 600-billion second round of quantitative easing, nicknamed QE2.

"Sobering Words last night by Bernanke confirmed the fears of many in the market-economic recovery remains fragile and there is no further stimulus package coming for the moment," said merchant sales IG Index Yusuf Heusen.

Asian stocks mainly edged down Thursday as traders even poorer Chinese characters pores and cashed after a two-day regional events.

Growth in production of China fell to a low of 11 months of June, preliminary data showed on Thursday, HSBC published as Beijing's efforts to cool the Red-Hot economy has continued to bite.

Preliminary index of purchasing managers HSBC fell to 50.1 in June by a final reading of 51.6 in may, the British banking giant, he said, showing that the sector grew barely as authorities close restrictions on bank loans.

A reading above 50 indicates that the sector is expanding, while a reading below 50 indicates contraction.

"Chinese just expanded in June," said strategist City Index Joshua Raymond.

"A slowdown of growth in China is a growing concern among investors, especially those with displays of raw materials and resource equities.

"Of course, therefore, we have seen a move by investors to switch positions in the field of resources today, with the miners and oil companies most affected," he added.

In the United States, the Federal Reserve has cut its estimate of growth for the economy of the United States this year to a percentage of the 2.7-2 .9, from an earlier forecast of 3.3 -3.1 percent.

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Oil dips to lowest since February as IEA taps stocks (Reuters)

NEW YORK (Reuters)-oil prices crashed more than $ 8 for a minimum of four months Thursday after consumer Nations of the world said they would band together to help the global economy by releasing emergency oil reserves for the third time.

Oil prices fell to their lowest since the eruption of the civil war of Libya in February stemmed exports from OPEC member, putting a strain on global supplies of oil. International Energy Agency said it would be helpful to ease the strain releasing 60 million barrels of Government stock, immediately increase global supply of almost 2.5 per cent.

The move shocked traders who had been waiting for the IEA's best exporter Saudi Arabia to give more time to compensate for the deficiency in supply next OPEC meeting failed 8 June, when other members blocked the efforts of the Gulf of excursion.

"I am really surprised. All saying that you have enough stocks. This should keep WTI (U.S. crude) under $ 100 (per barrel), but we really want Brent there this should help, "said Robert Montefusco, at Sucden Financial Broker.

Brent crude Futures for August plunged by more than 8 dollars after news, almost its lowest intraday price since February 22. From 10:03 am EDT was down to $ 7.41 106.80 a barrel set for its biggest fall from a deep crisis on 5 May.

U.S. crude delayed the decline, but still fell 5.20 $ $ 90.21 a barrel, prices more than 20 percent below their early may peak at more than $ 114, the highest since 2008.

The move came as the oil market has dropped sharply amid concerns over global demand for fuel higher than expected jobless claims United States U.S. growth forecasts lower, and the evidence of a slowdown in Chinese production.

New claims for unemployment benefits United States rose more than expected last week, a Government report showed Thursday, suggesting little improvement in the labour market this month after employment stumbled in May.

The Sell-off followed a move by the US Federal Reserve on Wednesday cut its growth forecast for the world's largest economy.

IEA EYES ECONOMIES

"This interruption of supply has been underway for some time and its effect has become more pronounced as he continued," the IEA said. It is said that the expectations were that Libyan production would remain out of the market for the rest of 2011.

"A greater grip on the oil market is likely to undermine the fragile global economic recovery," he said.

The release of the IEA to 2 million barrels per day (bpd) over the next 30 days, is more than the daily loss of exports of 1.2 million barrels per day of Libya and despite many views that the world is not immediately run out of crude-though many analysts and agencies also agree that markets are tightening this year.

In this context, analysts have said that the use of reserves now-unlike the previous two releases, which immediately followed the first Gulf war and Hurricane Katrina-reported that may have been more interested to temper prices to help a faltering economic recovery.

"The move is significant because it represents a capacity by member countries for the remedy of last resort to high oil prices," said John Kilduff, new capital partners LLC. "Clearly, the peak price of energy is being cited as the reason for the economic slowdown and this is a reaction to that. The Libyan provides good cover interruption. "

(Additional Reporting by Manash Goswami to Singapore and Christopher Johnson in London; editing by Lisa Shumaker)

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