Global stocks slide over growth fears

Global stocks as measured by MSCI fell to their lowest this year Wednesday as investors fretted about the pace of economic growth. Wall Street's rout also resumed, even as a gauge of US private jobs surprised on the upside, with safe-haven gold at a record on concerns the global recovery was stalling. MSCI's world equity index fell 1.5 per cent and was down for a sixth straight session, after hitting its weakest since early December. Fiscal cutbacks Article continues below Investors worry that fiscal cutbacks amid Western credit softness and stagnating output are weighing down the global recovery. Weak US services sector data yesterday and poor manufacturing data earlier this week accentuated the fragile outlook. "Like [with] manufacturing, the trend is undeniable. We have been slowing now since the beginning of the year," said Tom Porcelli, US economist at RBC Capital Markets in New York, referring to the services ISM data. "This will not quell the chatter in the market that we may be moving toward a recession." Energy and industrial metals prices fell as the economic view darkened. Brent slipped below $115 per barrel, US crude fell under $93 and copper lost 1.2 per cent. The Reuters/Jefferies CRB commodities index lost 0.5 per cent. Gold hit a record for a second straight day, driven by deepening fears over the spread of the European debt crisis and its impact on regional growth, while data showed a number of central banks bought the precious metal in June. Spot gold was last quoted at $1,669.105 an ounce past 10am New York time (1400 GMT) having earlier hit a record $1,672.65 per ounce. At 11am EDT (1500 GMT), the Dow Jones industrial average was down 82.12 points, or 0.69 per cent, at 11,784.50. The Standard & Poor's 500 Index was down 9.20 points, or 0.73 per cent, at 1,244.85. The Nasdaq Composite Index lost 18.55 points, or 0.69 per cent, at 2,650.69 on top of Tuesday's losses. European stocks fell 1.4 per cent to their lowest in almost a year. In foreign exchange markets, the Swiss franc retreated from record highs after the Swiss National Bank unexpectedly cut interest rates to counter its rise. Spanish and Italian bonds rose for the first time in six days after the Swiss central bank cut interest rates, stoking speculation euro-area policy makers may also take action to ease stresses in financial markets. German bunds swung between gains and losses as Italian Finance Minister Giulio Tremonti met with Luxembourg Prime Minister Jean-Claude Juncker to discuss economic challenges facing the region. The European Commission is set to issue a statement on the "situation in the financial markets" yesterday, while the European Central Bank makes its monthly decision on interest rates Thursday. Bonds rise The benchmark 10-year US Treasury note was up 12/32, with the yield at 2.5687 per cent, and the 30-year bond rose two points, its yield easing to 3.80 per cent from 3.91 per cent late on Tuesday. Gold hit a record for a second straight day yesterday, powered by deepening fears over the spread of the Eurozone debt crisis, while the most recent batch of US data did not dispel concern about the world's biggest economy. The US avoided an unprecedented debt default on Tuesday with a last-minute deal on raising the country's borrowing limit. Spot gold was last quoted at $1,668.06 an ounce, up 0.5 per cent on the day at 1410 GMT, having hit a record $1,672.65 earlier.