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GLOBAL MARKETS-Stocks fall, bonds gain as investors seek safety

Published 25/11/2015, 03:34 am
© Reuters.  GLOBAL MARKETS-Stocks fall, bonds gain as investors seek safety
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* U.S. stocks fall in early trading

* Low-risk bond yields fall after Turkey downs Russian jet

* U.S. travel warning hits tourism-linked stocks (Updates with U.S. market openings, changes dateline, previous LONDON)

By Caroline Valetkevitch

NEW YORK, Nov 24 (Reuters) - World stock markets fell while government debt prices rose on Tuesday as investors sought safety in low-risk assets after Turkish jets shot down a Russian warplane near the Syrian border.

The dollar fell against the traditionally safe-haven Japanese yen, helping to push oil and metals prices higher. Gold rose 1 percent.

Travel and leisure stocks .SXTP fell after the U.S. State Department late Monday warned U.S. citizens of the risk to worldwide travel posed by what it called increased terrorist threats. ID:nL1N13I2IM United Continental UAL.N , American Airlines AAL.O and Delta Air Lines (N:DAL) DAL.N all were lower in early U.S. trading.

The warplane incident was the first time a NATO member's armed forces had shot down a Russian or Soviet military aircraft since the 1950s. Russia said its plane had been downed over Syria. urn:newsml:reuters.com:*:nL8N13J14S

"This has really gotten investors' attention," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "Investors are worried that tensions could escalate."

Wall Street cut its losses in midday trading, however.

The Dow Jones industrial average .DJI fell 16.9 points, or 0.09 percent, to 17,775.78, the S&P 500 .SPX lost 5.46 points, or 0.26 percent, to 2,081.13 and the Nasdaq Composite .IXIC dropped 25.30 points, or 0.5 percent, to 5,077.18.

The MSCI index of global stock markets .MIWD00000PUS fell 0.3 percent, and a broad gauge of European stocks .FTEU3 dropped 1.3 percent. urn:newsml:reuters.com:*:nL8N13J2M4

Turkish shares .XU100 dropped, as well, while the prospect of escalating tension between the former Cold War foes gave an additional push lower to German yields.

In U.S. Treasuries, the 30-year yield hovered near 3 percent, while benchmark 10-year Treasuries notes US10YT=RR were up 6/32 in price to yield 2.227 percent. urn:newsml:reuters.com:*:nL1N13J18H

The dollar index .DXY , which measures the dollar against six major world currencies, fell 0.1 percent. urn:newsml:reuters.com:*:nL1N13J1BK

But the dollar's weakness and escalating tensions in the Middle East helped oil prices, with Brent futures LCOc1 up more than 2 percent at $45.81 a barrel and U.s. crude CLc1 also up more than 2 percent at $42.70. urn:newsml:reuters.com:*:nL3N13J0V1

Gold rose, recovering from near six-year lows after the warplane news. Spot gold XAU= peaked at $1,080.51 and was up 0.7 percent at $1,077.30 an ounce. urn:newsml:reuters.com:*:nL3N13J2NO

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