GLOBAL MARKETS-Investors run for safe-havens after US data

NEW YORK (Reuters) - Investors fled U.S. stock
markets Wednesday and poured into Treasuries after dismal
economic data, driving benchmark yields to below 3.0 percent
for the first time since December.
    The dollar also fell after the latest employment and
manufacturing indicators signaled that U.S. economic growth may
be slowing more quickly than first thought.
    Oil prices fell as much as 2 percent, while
gold, another safe haven like Treasuries, rose nearly
1.0 percent.
    ``The sugar high that has buoyed the U.S. economy over the
past six months is wearing out, and there is little in economic
growth or foundation to show for it,'' said Douglas Borthwick, a
managing director with Faros Trading in Stamford, Connecticut.
    The dollar fell for a third straight session against a
basket of currencies  -- losing nearly 2 percent since
last Thursday. Yields on benchmark 10-year U.S. Treasury debt,
the favorite asset of investors looking for a safe place to
store cash in tough times, hit December lows.
    ``The dollar has no choice but to weaken, given exports are
the only bright spot in the United States,'' Borthwick said.
    Growth in the U.S. manufacturing sector slowed sharply in
May, with the Institute for Supply Management's index of
national factory activity falling to 53.5 in May, its lowest
level since September 2009.
    That followed surprising private employment data from
payrolls processor ADP that showed poorer job growth in May
than expected, leading many Wall Street banks to slash
forecasts for Friday's May employment data.
    ADP's survey showed private employers in the United States
added a scant 38,000 jobs in May, nearly four times below that
expected by the market.

    FAILED STIMULUS
    The job additions were the lowest published by ADP since
September 2010. Analysts expect Friday's official total
non-farm payroll numbers for May to be much better.
    ``It fits very neatly in with the puzzle we are putting
together that speaks to another soft patch and really, a
genuinely failed stimulus approach to growing the economy,''
said Peter Kenny, managing director at Knight Capital in Jersey
City, New Jersey.
    ``And it's not just about jobs. It's about manufacturing,
it's about real estate, it's about consumer confidence. This is
one data point in a very broad picture, and it's not
encouraging.''
    Just after 1 p.m. EDT, the Dow Jones industrial average
was down 179.56 points, or 1.43 percent, at 12,390.23.
The Standard & Poor's 500 Index was down 18.32 points,
or 1.36 percent, at 1,326.88. The Nasdaq Composite Index
was down 31.77 points, or 1.12 percent, at 2,803.53.
    The benchmark 10-year U.S. Treasury note was up
27/32, its yield at 2.9607 percent.
    The euro surged to a four-week high versus the dollar
, although it fell to a record low against the Swiss
franc , the preferred safe-haven among currencies.
    While the euro has rebounded lately on optimism that
debt-plagued Greece may get a second bailout after all, some
investors remain worried about the global picture, including
the scheduled end this month of a $600 billion U.S. stimulus,
known in market jargon as Quantitative Easing, or QE2.
    ``With the QE2 package due to expire at the end of the
month, there's no shortage of uncertainty as to what happens
when the easy money disappears,'' said Cameron Peacock, market
analyst at IG Markets.
    Surveys showing factory growth eased in Europe and Asia
also sounded a note of caution for investors.
    Two surveys showed Chinese factories expanded in May for
the 27th straight month, although at a slower pace, suggesting
government efforts to curb credit are helping to cool the
economy.
    In Europe, fresh signs of decline among factories on the
euro zone's debt-laden periphery tugged sharply on
manufacturing growth across the region as a whole in May.