Global stocks slide on economic fears

By Herbert Lash

NEW YORK (Reuters) - Stocks fell around the world on Wednesday after reports of declining U.S. retail sales and falling output in Europe dimmed hopes for a rapid economic recovery, spurring demand for safe-haven assets like gold and government debt.

The U.S. dollar rallied against most major currencies after news of the unexpected drop in U.S. retail sales in April reminded investors of the rocky road to recovery for a global economy mired in its worst recession in decades.

Oil prices slid after earlier gains as the heavy losses on Wall Street outweighed a government report showing a surprise drop in U.S. crude and gasoline stockpiles.

Spot gold prices touched a six-week high above $930 (614 pounds) an ounce on buying by exchange-traded funds and increased interest in the metal following the losses in equity markets.

"Green shoots of a global recovery were hit by a round of frosty economic data today," said Vassili Serebriakov, a currency strategist at Wells Fargo Bank in New York.

Major U.S. and European stock indices closed down more than 2.0 percent, while MSCI's all-country index .MIWD00000PUS was off 2.3 percent at the close on Wall Street.

The Dow Jones industrial average .DJI was down 184.22 points, or 2.18 percent, at 8,284.89. The Standard & Poor's 500 Index .SPX was down 24.43 points, or 2.69 percent, at 883.92. The Nasdaq Composite Index .IXIC was down 51.73 points, or 3.01 percent, at 1,664.19.

The U.S. Commerce Department said retail sales slipped 0.4 in April after a 1.3 percent decline in March.