(Adds comment, fresh prices)
* Global shares slide as Wall Street cools a bit
* Bonds rally on safety appeal, dollar backs away from highs
* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
NEW YORK/LONDON, May 19 (Reuters) - Global equity markets
skidded further on Thursday as fresh signs of slowing growth led
investors to sell stocks and move into safe-haven assets such as
government debt and the Swiss franc, poised for its biggest
one-day gain in more than six-years.
Supply chain woes continued to fuel inflation and growth
concerns as Cisco Systems Inc warned of persistant
component shortages, pushing its shares down 13% to help drive
the S&P 500 closer to bear market territory.
Data showed factory output in the U.S. Mid-Atlantic region
decelerated far more than expected in May with the business
outlook for the six months ahead the weakest in more than 13
years, a regional Federal Reserve bank survey said.
On Wall Street, stocks traded mixed. The Dow Jones
Industrial Average fell 0.62%, the S&P 500 lost
0.04% and the Nasdaq Composite added 0.91%.
Traders are looking for a catalyst that will turn the market
around as near-term bottom approaches, said Rick Meckler,
president of hedge fund LibertyView Capital Management LLC.
"There's probably still enough fear among investors to see a
few more downdrafts," he sad. "But I think we're starting to hit
a point where prices seem more in line with economic conditions.
We may shift from overwhelming pessimism to starting to look for
hopefully some turns in the problems that we're facing."
Goldman Sachs now estimates a 35% probability of a U.S.
recession in the next two years, while Morgan Stanley's sees a
25% chance of one in the next 12 months.
In yet another sign of rising prices, U.S. spot power and
natural gas prices soared to their highest in over a year in
some U.S. regions as Americans cranked up air conditioners to
escape an early spring heatwave.
MSCI's gauge of stocks across the globe shed
0.28% and the pan-European STOXX 600 index closed down
a preliminary 1.46%.
Asia-Pacific shares ex-Japan snapped four
days of gains to wilt 1.8%, dragged down by a 1.65% loss for
Australia's resource-heavy index, a 2.5% drop in Hong
Kong. Tokyo's Nikkei shed 1.9%.
Germany's 10-year bond yield fell below 1% and U.S. Treasury
yields fell as continued softness in U.S. economic data stirred
growth concerns that the Federal Reserve's aggressive monetary
tightening may exacerbate.
The yield on 10-year Treasury notes fell 5.6
basis points to 2.828%, after earlier hitting a three-week low
The dollar fell across the board to extend its pullback from
a two-decade high, as most major currencies battered by the
greenback's advance this year drew some buyers.
The dollar index fell 0.925%, with the euro up
1.08% to $1.0579. The Japanese yen strengthened 0.47% to 127.64
The focus remained on what central banks will now do as they
walk a tightrope of trying to regain control of inflation, which
is now at 40-year highs in some countries, without causing
"We will have to discuss what we can do together in our
respective areas of responsibility to avoid stagflation
scenarios," German finance minister Christian Lindner said as he
arrived for a two-day meeting of top central bankers near Bonn.
Oil prices rebounded from earlier losses as Chinese
officials planned to ease restrictions in Shanghai, which could
further tighten global energy supply, and as the dollar
retreated from recent gains.
U.S. crude recently rose 0.39% to $110.02 per barrel
and Brent was at $110.30, up 1.09% on the day.
(Reporting by Herbert Lash, additional reporting by Marc Jones
in London, Francesco Canepa in Koenigswinter, Germany, Stella
Qiu in Beijing and Alun John in Hong Kong; Editing by Kirsten
Donovan and Bernadette Baum)