World stocks slip after Wall Street battering

The dollar, which tends to rise in such circumstances, was generally weaker, with signs that U.S. Federal Reserve Chairman Ben Bernanke was moving closer to being re-confirmed in his job lifting higher-yielding currencies.

Wall Street stocks capped their worst three-day slide in 10 months on Friday on fears that President Barack Obama's plan to limit risk-taking by banks would undermine profits in the financial sector.

U.S. stock futures were higher on Monday, however, suggesting that the sentiment may shift during the day and helping lift European stocks off their lows.

World stocks as measured by MSCI <.MIWD00000PUS> were down 0.2 percent for a near 2 percent loss so far this year. The FTSEurofirst 300 <.FTEU3> lost 0.2 percent and Japan's Nikkei <.N225> closed down three-quarters of a percent.

Markets have had an unsettled start to the year, buffeted by a variety of risks, Barclays Capital asset allocator Tim Bond wrote in a note. But he added: The overall background liquidity and growth environment is still very constructive.

Greece was expected to open the order book for its 5-year syndicated bond issue of up to 5 billion euros ($7.07 billion). How it fares could be crucial in deciding whether market jitters over Greek debt and possible contagion continue mounting.

Last week saw early signs of concerns spreading to Spain and Portugal.

BERNAKE AGAIN

The dollar slipped against the euro and higher-yielding currencies after broad gains last week.

Reports that embattled Federal Reserve Chairman Ben Bernanke was edging closer to winning confirmation to serve a second term also quelled markets, tarnishing the dollar's safe-haven appeal.

Markets have been fretting since late last week over whether Bernanke would be approved for the job.

Several key senators have announced their opposition to Bernanke's reappointment, but the Fed chief appeared closer to winning support after the Senate's Republican leader predicted he would be confirmed.

The euro pulled further away from a near six-month low hit against the dollar last week. It was at $1.4150.

The market was very volatile last week and we saw a big squeeze on the euro, so there's been some consolidation today, said Marcus Hettinger, global currency strategist at Credit Suisse in Zurich.

Benchmark euro zone government bond yields rose with investors focusing on the Greek syndicated bond sale.

(Additional reporting by Naomi Tajitsu)