Mexico peso hit by U.S. outlook worries; stocks up

(Recasts; adds analyst comments, background)

MEXICO CITY, May 22 (Reuters) - Mexico's peso slipped on Friday on worries about the fiscal outlook of the United States, which undermined investor appetite for emerging-market assets, but stocks rose, supported by gains in America Movil.

The peso MXN= MEX01 weakened 0.66 percent to 13.157 per dollar at the central bank's final 1:30 p.m. (1830 GMT) reference. The peso slid to 13.19 per dollar in late afternoon.

Investors are concerned that the widening U.S. budget deficit and weakened economy could take the shine off typically safe-haven U.S. dollar-denominated assets. These worries drove down the dollar and U.S. Treasuries on Friday.

"There could be a significant strain on the U.S. economy for a longer time than expected and that would be bad for all emerging market assets," said Nick Chamie, head of emerging market strategy at RBC Capital Markets in Toronto.

Mexico's economy is tightly linked to the United States, where a fall in consumer demand is hammering Mexico's exports, driving the local economy into its deepest recession since a mid-1990s financial crisis.

Citigroup unit Banamex said it now expects Mexico's economy to shrink 6.2 percent this year compared to a previous call of a 5.2 percent contraction, the brokerage said in a report published late Thursday.

The peso rallied to a six-month high earlier this week, breaking below 13 per dollar, but has slipped as Mexican companies fearful of another spike in the exchange rate rushed in to buy dollars, traders said.

"Companies are afraid the peso won't get any stronger," said Ramon Cordova, a trader at Base Internacional brokerage in Mexico City.