Global stocks, the euro and oil prices fell on Friday after hopes for more stimulus from central banks faded, with expectations Spain will seek assistance for its banks likely to keep investors cautious.
On Wall Street, stocks were little changed as investors awaited the outcome of talks in Europe on Spain's ailing banks.
Senior EU officials said finance ministers of the 17-nation single currency area would hold a conference call on Saturday to discuss Spain's request for an aid package for its banks, although no figure had been set.
Losses in world shares followed a three-day rally built on expectations of global coordinated efforts to bolster slackening economic growth. But investors were disappointed after neither the European Central Bank nor the U.S. Federal Reserve signaled near-term action.
"Financial markets are bipolar," said Ward McCarthy, chief financial economist and managing director, fixed income division at Jefferies & Co in New York. "Periodic fits of irrational exuberance are followed by the acknowledgement of reality. That is why it was risk on earlier this week and risk off today."
MSCI's world equity index was down 0.4 percent at 300.01. The index is still up 2.6 percent on the week, on pace for its best week since January.
U.S. stocks turned positive after a lower open. The Dow Jones industrial average was up 47.19 points, or 0.38 percent, at 12,508.15. The Standard & Poor's 500 Index was up 4.64 points, or 0.35 percent, at 1,319.63. The Nasdaq Composite Index was up 12.62 points, or 0.45 percent, at 2,843.64.
Top European shares trimmed early losses to trade 0.24 percent lower.
U.S. President Barack Obama said on Friday that European leaders face an "urgent need to act" to resolve the region's financial crisis as the threat of a renewed recession there spells dangers for an anemic U.S. recovery five months before elections.
The euro fell 0.7 percent to $1.2487, retreating from a two-week high of $1.2625 hit on Thursday.
More losses would leave the euro vulnerable to a test of the 23-month low of $1.2286 hit on June 1, using Reuters data, after failing to break above chart resistance at $1.2623, the January low.
Rating agency Fitch slashed Spain's credit rating on Thursday, leaving it just two notches short of junk status. It signaled further downgrades could come as the country tries to restructure its troubled banking system.
Adding to the bearish sentiment was data showing Italian industrial production fell far more than expected in April and German imports tumbled at their fastest rate in two years.
Brent crude for July was down $1.56 to $98.37 a barrel, after hitting a low of $97.19.
U.S. crude prices fell $1.45 to $83.37 a barrel, having touched a low of $82.00. Both contracts are down for a second day.
Copper fell to its lowest since December as investors feared China's surprise interest-rate cut was a sign of a sharp slowdown in the world's biggest metals consumer.
The metal, seen as a barometer of global economic health, is on track to extend its losing streak to a sixth week, its longest such run in two years.
Spot gold was at $1,587.75 an ounce, down from $1,589.15 late in New York the previous day.
The benchmark 10-year U.S. Treasury note was up 8/32, the yield at 1.6149%.
