By Herbert Lash
NEW YORK (Reuters) - Global stocks slid and the U.S. dollar rose on Friday as investors cut their exposure to risky assets amid signs of an anaemic U.S. economic recovery.
Investors sought safe havens ahead of a holiday-shortened week in the United States and in anticipation of the year-end period, which can prove to be volatile.
Oil fell below $77, weighed by the stronger dollar, and falling stock prices raised worries about the economy and the outlook for energy demand.
Most U.S. Treasuries prices retreated as traders cut prices ahead of the auction of $118 billion next week. But demand for short-term debt before year's end pushed yields on the two-year note below 0.68 percent, their lowest since last December.
Yields on short-dated Treasury bills pushed below zero as investors clamoured for low-risk investments on bets central banks will hold rates at ultra-low levels for a long time.
"People are getting out of risk, getting into Treasuries for the year-end, everybody is parking money," said James Combias, head of government bond trading at Mizuho Securities USA in New York.
U.S. gold futures ended higher for a sixth straight session despite the dollar's rise in a late session rally that could bode well for next week, traders said.
Equity markets around the world fell as investors took profits as the end of 2009 approaches. MSCI's all-country world index <.MIWD00000PUS> has gained more than 70 percent from March lows, and investors are leery of any signs of weakness as they seek to justify further advances in equity prices.
"It's been a very good year for a lot of people, and it makes sense that players are going to square up positions today ahead of the U.S. holiday and month-end," said Michael Woolfolk, strategist at BNY Mellon in New York.
U.S. markets will close next Thursday for the Thanksgiving holiday, while Monday marks a national holiday in Japan.
Worse-than-expected quarterly results from computer maker Dell Inc
The Dow Jones industrial average <.DJI> closed down 14.28 points, or 0.14 percent, at 10,318.16. The Standard & Poor's 500 Index <.SPX> fell 3.52 points, or 0.32 percent, at 1,091.38. The Nasdaq Composite Index <.IXIC> slid 10.78 points, or 0.50 percent, at 2,146.04.
For the week, the Dow rose 0.5 percent, the broad market S&P 500 fell 0.2 percent and the technology-rich Nasdaq slipped 1 percent.
A decline in technology shares is problematic, and "not a sign of a healthy market," said Quincy Krosby, market strategist at Prudential Financial in Shelton, Connecticut.
"We're not writing the obituary for this market, but it is consolidating, getting far more careful. It is prudent to take some money and some risk off the table," Krosby said.
An absence of fresh economic news made many markets choppy. Investors reacted to a wave of speculation about the risk of a default on Ukraine's sovereign and sovereign-guaranteed debt, despite no new development to trigger the sudden fright.
Gold for December delivery settled up $4.90 at $1,146.80 an ounce in New York.
The dollar rose against a basket of major currencies, with the U.S. Dollar Index <.DXY> up 0.42 percent at 75.606.
The euro fell 0.39 percent at $1.486, and against the yen, the dollar fell 0.09 percent at 88.95.
The dollar is down some 14 percent since mid-March as signs of a global recovery prompted investors to favour higher-yield currencies and assets. Expectations for record low U.S. interest rates well into 2010 have also hurt the greenback.
Commodity prices also fell as investors have scoured economic data for signs of a recovery that would boost global energy demand.
"Oil is clearly still tied to broader financial markets and seeing losses due to a stronger dollar and a drop in stock prices," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
U.S. crude for December delivery, which expired Friday, fell 74 cents to settle at $76.72 a barrel. London Brent crude for January delivery slipped 44 cents to settle at $77.20.
The benchmark 10-year U.S. Treasury note was down 6/32 in price to yield 3.36 percent.
The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> fell 0.7 percent, and Japan's Nikkei index <.N225> slid 0.5 percent.
(Reporting by Ellis Mnyandu, Steven C. Johnson, Edward McAllister, Chris Reese, Ellen Freilich and Frank Tang in New York; Ian Chua and Atul Prakash in London; writing by Herbert Lash; Editing by Leslie Adler)
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Last updated: 20 November 2009, 23:27
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