* World equity markets head for second weekly fall
* U.S. stocks slip ahead of budget talks at White House
* Brent crude above $108 a barrel on Middle East tension
By Herbert Lash
NEW YORK, Nov 16 World shares headed toward a
second consecutive weekly loss on Friday as U.S. government
fiscal problems and weak global economic growth weighed on
sentiment, while violence in the Middle East pushed up oil
prices despite ample stockpiles and weak energy demand.
U.S. stocks briefly rebounded after the open on a report
that White House officials were in advanced talks to replace
sweeping spending cuts with targeted cuts and tax increases, in
a move to avoid the so-called "fiscal cliff" in early 2013.
"This is the first time we've had one iota of anything
constructive being done," said Todd Schoenberger, managing
principal at the BlackBay Group in New York. "That's very
positive, but you can be flexible and still have us go over the
cliff. Wall Street traders remain very nervous and need
something concrete to get done."
President Barack Obama and congressional leaders are set to
meet for budget talks on Friday. Investors have been concerned
that if no deal was reached to modify automatic spending cuts
and tax hikes, the U.S. economy could slip into recession.
But Wall Street stocks soon turned lower, following a
downturn in equity markets in Europe, where persistent worries
about the euro zone's ability to deal with its debt problems are
The Dow Jones industrial average was down 53.75
points, or 0.43 percent, at 12,488.63 by midmorning. The
Standard & Poor's 500 Index was down 6.66 points, or 0.49
percent, at 1,346.67. The Nasdaq Composite Index was
down 15.47 points, or 0.55 percent, at 2,821.46.
The MSCI world equity index was down 0.5
percent at 315.94 points, and has lost almost 2 percent this
FTSEurofirst 300 index of top companies shed 0.7
percent to 1,071.28, on course for its worst week since late
The Japanese yen steadied after a two-day pummeling against
the U.S. dollar, but remained on track for its worst weekly loss
since late June on expectations of aggressive monetary easing
from the Bank of Japan.
"The basic driver is still the interest rate differential
between the dollar and yen, which is very narrow, and we have to
wait for what happens after the elections," said Marcus
Hettinger, global FX strategist at Credit Suisse in Zurich.
The U.S. dollar was up 0.06 percent at 81.19 yen. The
euro was down 0.55 percent against the dollar at $1.2709.
Benchmark Brent crude oil prices rose towards $109 a barrel
as a showdown between Israel and the Palestinians stoked worries
about supply. Investors were concerned that Arab producers may
be drawn into any potential conflict, which could impact supply
Brent crude rose 56 cents to $108.55 a barrel. U.S.
oil gained 60 cents to $86.05.
U.S. Treasury debt prices were little changed, with yields
near two-month lows, ahead of the U.S. budget talks.
The benchmark 10-year U.S. Treasury note was up
3/32 in price to yield 1.5843 percent.