By Herbert Lash

NEW YORK (Reuters) - Wall Street's miserable month of June continued on Friday as global stocks fell further and oil climbed to another record as investors fled risk to the safety of government bonds, gold and the Swiss franc.

Crude surged to a new record high of more than $142 a barrel, before paring some of its gains. Tumbling equity markets helped trigger a wider rally in commodities as investors took cash out of stocks and shifted to other assets to take advantage of inflation.

Gold rose to a one-month high, lifted by the new spike in oil prices and a drop in the dollar against the euro. The safe-haven Swiss franc rose to a three-week peak against the dollar. Spot gold prices rose $11.55 to $927.80 an ounce.

U.S. Treasury debt rose after a rather benign reading of inflation gave investors confidence the Federal Reserve may not have to raise interest rates soon to combat price pressure.

The benchmark 10-year U.S. Treasury note rose 10/32 to yield 3.99 percent. The 30-year U.S. Treasury bond added 23/32 to yield 4.55 percent.

"There is a bout of risk reduction across assets ... Oil prices headed up and that's putting more pressure on equities," said Martin McMahon, FX strategist at Credit Suisse in Zurich.

A new round of gloomy predictions about the outlook for banks renewed pressure on the battered U.S. and European financial sectors. Lehman Brothers predicted rival Merrill Lynch would write down another $5.4 billion (2.7 billion pounds) in the second quarter and slashed its price target for the stock.

Merrill shares initially fell, but rebounded to rise slightly in early afternoon trade.