2011-09-08 18:26:55 GMT (Reuters)
* Investors look to government, central banks for help
* Fed's Bernanke pledges more aid but mum on details
* Markets await Obama's jobs plan, doubts over feasibility
* ECB rates unchanged, Trichet sees downside growth risks
(Recasts lead, updates action after Bernanke remarks)
By Richard Leong
NEW YORK, Sept 8 (Reuters) - Wall Street stocks fell on Thursday on disappointment that a speech by the Federal Reserve chief lacked details on plans to spur economic growth, while the euro slipped on fears the euro zone debt crisis is worsening with Greece failing to meet fiscal targets.
Safe havens were still in favor with investors, with gold prices rising after a two-day fall and German and U.S. government bonds yields edging lower.
Fed Chairman Ben Bernanke said the U.S. central bank "will do all it can" to boost economic growth and reduce unemployment, but he did not disclose what monetary tools the Fed might use. For more, see [ID:nW1E7IR02M]
"The markets are going to be disappointed in this and concerned that the Fed is only acknowledging the problems without offering any real solutions," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
U.S. President Barack Obama will deliver a televised speech to Congress at 7 p.m. (2300 GMT), in which he is expected to propose tax cuts for middle-class households and businesses and new spending to repair roads, bridges and other infrastructure. For details, see [nN1E786157]
"Everyone's waiting for the President to give a real, good, solid speech tonight. He's got to deliver something strong and positive," said Michael Cullen, head bond trader at Wall Street Access in New York.
Later this week, G7 finance ministers and central bankers will convene in Marseilles, France with markets expecting them to pledge support to help a struggling global economy. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic-interest rate outlook: http://link.reuters.com/pej23s Graphic - U.S. jobless claims: http://r.reuters.com/dym63s Graphic - U.S. trade balance: http://r.reuters.com/nym63s U.S. exports and the dollar: http://r.reuters.com/xan63s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
An earlier U.S. government report showing an increase in weekly jobless claims and remarks by European Central Bank President Jean-Claude Trichet about downside risks to the euro zone's economy fueled fears that both the United States and Europe are at risk of slipping into recession.
Those worries briefly pushed equities markets in negative territory before some buying emerged before Bernanke's speech.
At 2:04 p.m. (1804 GMT), the Dow Jones industrial average <.DJI> was down 66.52 points, or 0.58 percent, at 11,348.34. The Standard & Poor's 500 Index <.SPX> was down 8.82 points, or 0.74 percent, at 1,189.80. The Nasdaq Composite Index <.IXIC> was down 11.53 points, or 0.45 percent, at 2,537.41.
World stocks as measured by MSCI <.MIWD00000PUS> were down 0.4 percent. The MSCI index has recovered somewhat from the August correction -- the worst monthly loss since 2008 -- but is still 16 percent below the 2011 highs hit in May.
Earlier, Tokyo's Nikkei <.N225> finished up 0.3 percent, while the FTSEurofirst 300 index <.FTEU3> of top European shares ended up 0.9 percent after erasing earlier gains on the ECB's decision to leave key rates alone.
In the wake of Trichet's cautious economic outlook and the chances of no more rate hikes in the foreseeable future, the euro fell to a two-month low against the dollar. It touched a session low of $1.3943 on the EBS trading platform .
In the bond market, benchmark 10-year German Bund yields touched a historic low of 1.82 percent while the yield on U.S. 10-year Treasuries hovered at 2 percent, not far above a 60-year low of 1.9080 percent.
Spot gold prices jumped $40 at $1,856 an ounce. [GOL/]
(Additional reporting by Chuck Mikolajczak, Chris Reese, Gertrude Chavez-Dreyfuss in New York; Amanda Cooper, Kirsten Donovan and Jeremy Gaunt in London, Editing by Chizu Nomiyama)
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