* World stocks find footing after vicious sell-off
* Euro hits 2-month low after ECB holds rates steady
* U.S., German government debt prices little changed
NEW YORK, Nov 8 World stocks stabilized on
Thursday on hopes the United States will tackle its deep fiscal
problems to skirt a recession, while the euro fell to a
two-month low after the European Central Bank refrained from
taking more action despite signs of further economic slowdown.
A glimmer of investor confidence emerged that Washington may
reach a deal to avoid the "fiscal cliff," a set of automatic tax
hikes and spending cuts, which begin to kick in on Jan. 1.
Fears that a timely compromise was out of reach led to a
massive sell-off in stocks, oil and risky assets on Wednesday, a
day after U.S. President Barack Obama was re-elected and voters
left the Congress divided.
"To the extent we start to see some clarification of what
(Congress) is thinking about, whatever it may be, it will
provide some confidence," said Rick Meckler, president of
investment firm LibertyView Capital Management in Jersey City,
On Wall Street, the three major U.S. stock indexes dipped in
late morning trade, reversing slight gain after a flat opening.
The Dow Jones industrial average slipped 21.54
points, or 0.17 percent, to 12,911.19. The Standard & Poor's 500
Index shed 1.92 points, or 0.14 percent, to 1,392.61. The
Nasdaq Composite Index declined 3.90 points, or 0.13
percent, to 2,933.39.
The FTSE Eurofirst 300 index of top European shares
was little changed at 1,097.97, holding steady after logging its
biggest one-day drop in two weeks on Wednesday.
The MSCI world equity index was down 0.5
percent at 325.21 after Tokyo's Nikkei lost 1.5 percent.
Across the Atlantic, the ECB left key interest rate at 0.75
percent, disappointing some traders who had bet on more policy
easing in the wake of recent comments by President Mario Draghi
on the weak economic outlook and gloomy European Commission GDP
The absence of more ECB action spurred selling in the common
currency, knocking it down to a two-month low versus the
dollar at $1.2719. It last traded at $1.2739, down 0.25 percent
for the day.
"The general theme here is that weak growth is weighing on
the euro," said Steven Saywell, global head of FX strategy at
BNP Paribas in London.
The euro had been under pressure before the ECB decision
even though the Greek parliament approved in the early hours of
Thursday an austerity package needed to unlock international aid
and avert bankruptcy, defying political rifts and violent
Meanwhile, Spain, another heavily indebted euro-zone member,
sold 4.8 billion euros ($6 billion) of new debt, completing its
cash needs for this year. This meant Madrid can hold out longer
before asking for international aid.
The somewhat encouraging news in Europe curbed safe-haven
bids for U.S. and German government debt.
The yield on the benchmark 10-year U.S. Treasury note
held steady at 1.680 percent, while German Bund
futures were up 16 basis points at 142.91.
In commodity markets, oil rose after tumbling more than $4
on Wednesday on concerns about weak demand for fuel as the U.S.
and European economies face the risk of a protracted slowdown.
Brent crude traded 22 cents higher at $107.04 per
barrel after falling nearly 4 percent on Wednesday, its steepest
drop since December 2011.
U.S. crude rose 49 cents to $84.94, after losing
nearly 5 percent in the previous session, also its biggest slump
since December 2011.