Stocks, dollar slip after weak U.S. GDP data

Global stocks fell and the U.S. dollar extended losses against the Japanese yen on Friday as investors sought safety after a report showed the U.S. economy slowed a bit more than expected in the second quarter.
Government debt on both sides of the Atlantic rose after the U.S. Commerce Department said gross domestic product expanded at a 2.4% annual rate, less than the 2.5% pace analysts polled by Reuters said they expected.
U.S. Treasuries, German Bund futures and UK gilt futures extended gains while European stocks slipped and oil fell below $77 a barrel, extending an earlier drop, on news of the data.
The slowdown in the U.S. recovery had been flagged in recent weeks by a stream of weak economic data, adding to fears of those we see the economy slipping back into recession — the much talked about double dip.
"Oil is coming down further after the data was published, probably on the fear out there of a double-dip," said Daniel Briesemann, analyst at Commerzbank in Frankfurt.
U.S. September crude shed $1.42 to $76.94 a barrel. ICE Brent fell $1.25 to $76.34.
Global stocks as measured by MSCI's all-country world index fell 0.9, while its emerging market index dropped 0.8%.
The Dow Jones industrial average was down 81.74 points, or 0.78%, at 10,385.42. The Standard & Poor's 500 Index was down 9.92 points, or 0.90%, at 1,091.61. The Nasdaq Composite Index was down 23.76 points, or 1.06%, at 2,227.93.
Bond yields rose while their price, which moves inversely, fell.
The 30-year Treasury bond was up 1-4/32, its yield easing to 4.01% from 4.08% on Thursday.
September Bund futures climbed to 128.53, up 47 ticks on the day from a pre-data level of 128.41.
September gilt futures extended gains by around 10 ticks to hit a session high of 121.49 after the data.
The pan-European FTSEurofirst 300 extended losses, falling almost 1% to 1,036.57 points.
Even though U.S. economic growth slowed, capital investment driven by business spending boosted imports to their fastest pace since the first quarter of 1984, a possible silver lining. But the number was not encouraging.
"This is going to reinforce the sense people have that yes companies have cut costs, yes that has helped earnings, but the revenue line at some point has to get better and these GDP numbers are not moving in that direction," Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto,
The markets may test the July lows, but probably not go below that, Kumar said.
The dollar extended losses against the yen to hit a session low beneath 86 yen, and the greenback pared gains versus the euro.
The dollar was down 0.5% at 86.31 yen, after hitting a fresh eight-month low of 85.95 yen, according to Reuters.
The dollar also fell to a six-month low against the Swiss franc earlier of 1.0364 francs. That also prompted the Swiss currency to rise against the euro.
The euro fell 1.2% versus the yen to 112.10 yen and 0.6% versus the dollar to $1.3003.