(Adds U.S. market close)
* Germany avoids technical recession, China slowdown deepens
* European shares close lower, U.S. stocks trade mixed
* Dollar slips as safe-have yen, Swiss franc gain
* Government debt yields fall in flight to quality bid
By Herbert Lash
NEW YORK, Nov 14 (Reuters) - World stocks edged lower and
debt yields fell on Thursday as Chinese economic data slowed in
October and Germany narrowly avoided a recession in the third
quarter, adding to concerns about the U.S.-China trade war's
impact on global growth.
MSCI'S All-Country World index .MIWD00000PUS , which tracks
the performance of equity markets in 47 countries, slid 0.11%
while gold prices rose, moving further away from a three-month
low hit on Tuesday.
The dollar fell against the Japanese yen and traded near
break-even to slightly lower against the euro on diminished risk
appetite due to the difficult nature of the U.S.-China trade
talks amid ongoing political turmoil in Hong Kong.
The driver of investor sentiment is the status of a "phase
one" trade agreement, which had appeared to be in the cards but
not any more, said Kristina Hooper, chief global market
strategist at Invesco.
"Phase one had been considered a fait accompli, and it's not
and that's becoming clear," Hooper said.
China wants tariffs imposed by U.S. President Donald Trump
to be removed but has not made the agricultural purchases the
United States wants because swine flu has decimated its pork
industry and eliminated the need for U.S. soybeans.
"It really suggests that phase one is on shaky grounds and
if you can't get a phase one, forget about anything else,"
Hooper said.
Wall Street closed little changed, with the benchmark S&P
500 setting a new record closing high.
The Dow Jones Industrial Average .DJI fell 1.63 points, or
0.01%, to 27,781.96, the S&P 500 .SPX gained 2.59 points, or
0.08%, to 3,096.63 and the Nasdaq Composite .IXIC dropped 3.08
points, or 0.04%, to 8,479.02.
European shares fell after data showed the German economy
grew just 0.1% in the third quarter. Though Germans avoided
slipping into a mild contraction thanks to consumer spending,
economic growth remained weak nevertheless. The pan-European STOXX 600 .STOXX index closed down 0.36%,
while Germany's DAX .GDAXI fell 0.38%, also pulled lower by a
4.5% drop in Daimler DAIGn.DE shares. The carmaker said
tougher emissions rules would hit earnings in 2020 and 2021.
Ten-year bond yields across the euro area fell around 2
basis points each. Germany, French and Dutch yields reached
one-week lows NL10YT=RR , FR10YT=RR . GVD/EUR
France's 10-year bond yield slipped back into negative
territory a week after it turned positive for the first time
since July. Germany's Bund yield fell to a low of -0.353%
DE10YT=RR , down from last week's three-and-a-half-month low
around -0.22%.
In Asia, stocks fell after soft economic data in China and
Japan showed the trade war between Beijing and Washington was
hitting growth in some of the world's biggest economies.
China's factory output growth slowed significantly more than
expected in October, as weakness in global and domestic demand
and the drawn-out Sino-U.S. trade war weighed on broad segments
of the world's second-largest economy.
Chinese industrial production growth slowed sharply in
October, with the 4.7% year-on-year rise well below forecasts
for 5.4%. Investment growth hit a record low and retail sales
also missed expectations. Worries about spiraling violence as anti-government protests
intensify in Hong Kong have also soured investor sentiment.
Protesters paralyzed parts of Hong Kong for a fourth day,
forcing school closures and blocking highways and other
transport links in a marked escalation of unrest in the
financial hub. Hong Kong's Hang Seng .HSI fell 0.8% to a fresh one-month
In currency markets, safe havens such as the Japanese yen
and Swiss franc gained.
The dollar index .DXY fell 0.2%, with the euro EUR= up
0.13% to $1.102. The yen JPY= strengthened 0.36% versus the
greenback at 108.45 per dollar.
The Swiss franc CHF=EBS traded at 0.9880 versus the
greenback, also near its highest in more than a week.
The uncertainty over the U.S.-China trade deal also pushed
gold higher by denting demand for riskier assets.
U.S. gold futures GCcv1 settled up 0.7% at $1,473.40 per
ounce.
Oil slid as a build in U.S. crude inventories weighed on
prices, while comments from the Organization of the Petroleum
Exporting Countries about lower-than-expected U.S. shale
production in 2020 limited declines.
Brent crude LCOc1 futures settle dlonw 9 cents to $63.40 a
barrel, while U.S. West Texas Intermediate (WTI) crude CLc1
fell 35 cents to settle at $56.77 per barrel. The yield on benchmark 10-year Treasury notes US10YT=RR
fell 14/32 in price to push yields down to 1.8204%.