World stocks slip with euro; US stocks inch up

U.S. stocks, however, rose slightly in a bounce from recent losses after positive economic data on regional manufacturing and national homebuilder sentiment.

The MSCI world equity index slipped 0.3 percent, while the FTSE Eurofirst index of top European shares was down 0.6 percent.

Keeping pressure on shares were worries about a possible Greek exit from the euro zone. Investors have been concerned that long-lasting problems in the euro zone and a likely recession in Europe will hit global growth.

Greek politicians again failed to agree on a new government, nine days after an inconclusive election. After Greece's president said the country will hold new elections, the euro slumped and investors fled to the safe-haven dollar.

The Greek news "triggered the fall through $1.2800 and it looks like they can't compromise so they will have to hold elections," said Boris Schlossberg, director of FX Research, GFT in Jersey City.

"They are running out of money ahead of elections, so expect European leaders in the next few days to put enormous pressure on them to come up with a workable government along with some sort of extended schedule for the bailout."

The euro was last down 0.3 percent at $1.2786 with the session trough of $1.2769, the lowest since January 18.

Wall Street stocks opened little changed after the news about Greece but gained on signs of economic recovery. A gauge of homebuilder sentiment rose to the highest in five years this month. Separately, the pace of growth in New York state manufacturing rebounded, the New York Federal Reserve said.

Germany also kept hopes for growth alive when it reported that strong exports had helped its economy grow 0.5 percent in the first three months of the year, ahead of market forecasts.

Germany's performance offset zero growth in France and recession in Italy and Spain, leaving the whole 17-member euro zone economy stagnating but not in recession.

Some of the optimism from the German GDP data was dispelled after a business survey by the ZEW Institute taken in the first two weeks of May showed a big dip in sentiment since the latest bout of political instability in Greece and the renewed concerns about Spain and Italy's banking systems.

Crude oil was higher, with Brent June crude up 85 cents at $112.42.

The benchmark 10-year U.S. Treasury note was down 5/32, with the yield at 1.7843 percent.