* MSCI world share index dips 0.4 pct, European shares fall
* U.S. equity losses limited by strong Goldman results
* Euro recovers as ECB policymaker reassures markets
* German 10-year bond auction draws strong demand
By Ryan Vlastelica
NEW YORK, Jan 16 World stock markets fell on
Wednesday while prices of safe-haven German bonds and U.S.
Treasuries rose as weak economic data from Europe raised
concerns about the health of the global economy.
Financial shares in the United States rallied on strong
corporate results from Goldman Sachs, helping to limit
some of the broader market losses, which came as the World Bank
sharply cut its outlook for world growth.
The view for 2013 growth was reduced to 2.4 percent from 3
percent. The World Bank said a slow recovery in developed
nations was holding back the global economy.
"This is not a robust forecast, and that's a concern,
especially as it pertains to the continued weakness in Europe.
Things are stabilized, but we're still only seeing slow growth,"
said Steven Baffico, chief executive officer at Four Wood
Capital Partners in New York.
The Dow Jones industrial average was down 36.74
points, or 0.27 percent, at 13,498.15. The Standard & Poor's 500
Index was down 1.79 points, or 0.12 percent, at 1,470.55.
The Nasdaq Composite Index was up 4.26 points, or 0.14
percent, at 3,115.04.
Losses in U.S. equities were offset by financial shares.
Goldman Sachs rose 2.4 percent to $138.82 after it reported
fourth-quarter earnings that nearly tripled, while revenue
surged on dealmaking.
JPMorgan Chase & Co also reported sharp increases in
earnings, but the stock fell 1.6 percent to $45.60.
The MSCI world equity index fell 0.5 percent
while Europe's FTSE Eurofirst 300 index dipped 0.2
percent, on course for its fourth day of losses in the last five
sessions. Japan's benchmark Nikkei stock average shed
2.6 percent for its largest daily fall in eight months.
Along with the outlook, industry figures showed European new
car sales plunged in 2012 to the lowest level since 1995, with
all major euro zone markets suffering, whereas Britain and
Sweden recorded growth. This came a day after Germany reported
its economy shrank at the fastest pace in almost three years in
the final quarter of 2012.
"Following the German growth numbers yesterday there is
simply a realization the recession in the euro zone in the
fourth quarter will be much bigger than the previous consensus,"
said Daiwa Securities economist Tobias Blattner.
However, the euro recovered some of its losses against the
dollar after a European Central Bank policymaker eased fears
that officials might undermine the currency's recent strength.
The euro was trading just below $1.33 at around $1.3275
, having made up some of the ground lost when the outgoing
head of Eurogroup, Jean-Claude Juncker, said the currency was
The turnaround came when ECB policymaker Ewald Nowotny said
the exchange rate was "not a matter of major concern,"
reassuring investors that the central bank would not target a
weaker exchange rate to help the region's struggling economies.
In bond markets, Germany drew healthy demand for its debt at
an auction of new 10-year bonds.
"Uncertainties about the economic outlook and political
risks continue to loom and today's auction results are a sign
that market dealers still see some value in core (European)
debt," said Annalisa Piazza, market economist at Newedge.
Ten-year German bond yields in the secondary market rose
slightly to put yields at 1.479 percent.
U.S. Treasury prices, meanwhile, extended their recent gains
on concerns about the federal government's debt limit. The
benchmark 10-year U.S. Treasury note was up 5/32,
the yield at 1.8185 percent.
Assets traditionally viewed as offering protection against
risk have been boosted this week as political wrangling has
begun again over raising the U.S. government's self-imposed debt
limit, which is expected to be reached before March.
Gold was up 0.6 percent to $1,676.60 an ounce for a
third straight session of gains, supported by expectations that
the world's leading central banks will continue their
ultra-loose monetary policies.
Worries over supply pushed platinum prices up 0.1
percent to $1,680.50 to mark a seventh straight session of
gains, the longest upward streak since early October.
Workers for top producer Anglo American Platinum downed
tools on Wednesday in protest at an announcement from the firm,
known as Amplats, that it would close mines and cut jobs.
Cold weather in Europe and the United States underpinned oil
prices but the rising fears over the global growth outlook meant
any gains were limited.
The Organization of the Petroleum Exporting Countries, in a
monthly report, also said demand for its crude would be lower
than expected in 2013 because of higher supply from rival
Brent futures were up 18 cents to $110.48 a barrel,
while U.S. oil rose 5 cents to $93.33.