GLOBAL MARKETS-Stocks sag around globe; dollar drops as U.S. Treasuries rise

Reuters - UK Focus

* Wall St indices end 1 percent lower

* Dollar slips after ECB policymaker comments

* U.S. oil prices slip below $100 a barrel (Adds U.S. closing prices)

By Michael Connor

NEW YORK (Frankfurt: HX6.F - news) , April 7 (Reuters) - Wall Street stocks slumped onMonday, extending a broad retreat in global equities marketsfrom a six-year high touched last week, while U.S. Treasuries'yields moved lower.

The dollar fell against major currencies as comments byEuropean Central Bank policymakers curbed expectations of moreeuro zone economic stimulus and boosted the euro against thegreenback.

On Wall Street, the biggest decliners were Internet stocks.The Nasdaq had its worst three-day decline since November 2011,while the three-day decline for the S&P 500 was its steepestsince late January.

The Dow Jones industrial average fell 166.84 points,or 1.02 percent, to 16,245.87, the S&P 500 lost 20.05points or 1.08 percent, to 1,845.04 and the Nasdaq Composite dropped 47.973 points or 1.16 percent, to 4,079.753.

Some equities investors, including those rotating intodefensive names to protect against further losses, worried thatthe declines may run on.

"The big concern is the overall underlying weakness in somany different stocks," said Ryan Detrick, senior technicalstrategist at Schaeffer's Investment Research in Cincinnati,Ohio. "The picture isn't nearly as pretty when you look underthe hood, and you see various sectors have clearly broken down,and now it's starting to pull down on the whole entire stockmarket."

Pfizer Inc (NYSE: PFE - news) , down 3 percent at $31.20, pressured theDow and S&P 500. Pfizer's experimental breast cancer drug nearlydoubled the time patients lived without their disease gettingworse in a clinical trial. But overall survival was not shown tobe statistically significant, researchers said.

Earlier in the global trading day, Japan's Nikkei fell 1.7 percent, while the FTSEurofirst 300 index oftop European shares gave up 1.2 percent at 1,336.11, down from a5-1/2-year high on Friday.

Britain's top equity index, the blue-chip FTSE 100 index, had its biggest one-day decline in a month, retreatingfrom a three-week high as a drop by house builders weighed onthe market.

The MSCI world equity index was down 0.87percent.

World equity markets had three straight weeks of gains aseasing tensions in the Crimea region of Ukraine encouragedinvestors to add risks.

"Markets are overbought over the short term. We have seen adecent run after the Crimean situation cool down a little bitand now it's quite natural to see a breather from that level,"said Gerhard Schwarz, head of equity strategy at Baader Bank (Xetra: BWB.DE - news) .

Wall Street's woes helped lift U.S. Treasuries prices,extending gains from last week as traders reduced bets theFederal Reserve might raise interest rates in the first half of2015.

Benchmark 10-year Treasuries were up 9/32 inprice to yield 2.692 percent, down 3 basis points from late onFriday, while the five-year note was 5/32 higher,yielding 1.668 percent, down nearly 4 basis points from Friday.

The 30-year bond rose 19/32 for a yield of 3.553percent, down 3 basis points from late on Friday.

Treasuries have strengthened in advance of the sale thisweek of $64 billion in coupon-bearing securities, whichtypically causes bond prices to fall as investors make room forthe supply.

"The driving factors this week are supply and whether thestock market falls off the cliff," said Thomas Roth, executivedirector of U.S. government trading of Mitsubishi UFJ Securitiesin New York

The dollar lost 0.25 percent against a basket of six majorcurrencies. The euro rose 0.3 percent to $1.3742.

Comments from ECB policymakers Ewald Nowotny and Yves Merschon Monday suggested more monetary easing from the central bankwas not imminent, which lifted the euro against the dollar.

Nowotny said there was no need to act immediately to countereuro zone disinflation, while Mersch said that while the centralbank was drawing up plans for large-scale asset purchases, itremained some way off.

U.S. oil futures dipped below $100, falling more than adollar a barrel after stock markets tumbled, with Brent crudeoil prices losing even more on the prospect of additionalsupplies from Libya.

Gold also fell, with some investors taking profits after arun-up of 1 percent on Friday credited to a short-covering rallyby investors who had worried U.S. jobs data would top forecasts.Spot gold was down 0.4 percent at $1,298.70 an ounce inlate New York trading.

(Reporting by Michael Connor; Additional reporting by Sam (Paris: FR0011660836 - news)Forgione, Richard Leong and Chuck Mikolacjzak; Editing by DanGrebler)

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