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US stocks follow global peers lower

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Global cyber outage and disruption weigh on mood

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Dollar set for weekly gain

(Updates to 2:50 p.m. ET)

By Isla Binnie and Caroline Valetkevitch

NEW YORK, July 19 (Reuters) - World stock indexes fell

on Friday as a global cyber outage rattled investors, while the

dollar climbed and was on track to snap a two-week streak of

declines.

The outage hit services from airlines to banks, unsettling

markets further after a turbulent week.

Cybersecurity firm CrowdStrike ( CRWD ) was last down 12.1%

after an update to one of its products appeared to trigger the

outage that affected customers using Microsoft's ( MSFT )

Windows Operating System, disrupting businesses across sectors.

Microsoft ( MSFT ) was down just 1%.

The Cboe Volatility index - Wall Street's "fear

gauge" - rose to its highest level since April 25.

"Today's outages remind us that services can have supply

chain disruptions too," said Jeff Kleintop, chief global

investment strategist at Charles Schwab. "While not a

cyberattack, the outage is a worrisome reminder of how our

systems are deeply integrated."

The Dow Jones Industrial Average fell 387.81 points,

or 0.95%, to 40,277.21, the S&P 500 lost 38.88 points, or

0.70%, to 5,505.71 and the Nasdaq Composite lost 145.15

points, or 0.81%, to 17,726.07.

MSCI's gauge of stocks across the globe fell

6.93 points, or 0.85%, to 810.52. The STOXX 600 index

ended down 0.77%.

Investors also braced for important results in the U.S.

second-quarter earnings season in the upcoming weeks. Results

from megacaps will be in focus, with the S&P 500

technology-related sector down about 5% this week as investors

rotated into sectors that have languished so far in 2024.

Tesla and Google-parent Alphabet both

report on Tuesday, kicking off results from the "Magnificent

Seven" megacap group of stocks that have propelled markets since

early 2023. Microsoft ( MSFT ) and Apple ( AAPL ) are set to report the

following week.

DOLLAR RECOVERS

The dollar index was on track for its second straight daily

advance, putting the greenback on pace for its first weekly gain

in three. It bounced back on recent U.S. economic data and

concerns about the technology outage.

Against the Japanese yen, the dollar strengthened

0.07% to 157.48.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

gained 0.25% to 104.40, with the euro down 0.18% at

$1.0876.

The European Central Bank kept interest rates on hold as

expected, but left the door open to a September cut. Two ECB

policymakers on Friday expressed greater confidence that

inflation was heading to the central bank's goal next year.

The Federal Reserve is scheduled for its next policy

announcement at the end of July.

Markets expect only a slight chance for a cut of at

least 25 basis points (bps), while almost completely pricing in

a cut at its September meeting, according to CME's FedWatch

Tool.

U.S. Treasury yields rose as investors waited on fresh data

next week.

The yield on benchmark U.S. 10-year notes rose

5.1 basis points to 4.239%, from 4.188% late on Thursday.

Oil prices fell as investors reacted to renewed hopes of a

possible ceasefire in Gaza. U.S. crude lost $2.69 to

settle at $80.13 a barrel, while Brent fell to $2.48 to

$82.63.

In cryptocurrencies, bitcoin gained 4.50% at

$66,692.00.