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US stocks follow global peers lower, megacaps mixed

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Global cyber outage and disruption weigh on mood

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Dollar set for weekly gain

(Updates at 11:20 a.m. EDT)

By Isla Binnie

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 ) fell 8.2% 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.

Euronext exchange and London Stock Exchange Group's ( LDNXF )

Workspace news and data platform also faced issues. LSEG later

said its data and services were back online.

"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 Cboe Volatility index - Wall Street's "fear

gauge" - was at its highest level since early May.

MSCI's gauge of stocks across the globe fell

4.69 points, or 0.57%, to 812.76. The STOXX 600 index

fell 0.76%.

The Dow Jones Industrial Average fell 337.37 points,

or 0.84%, to 40,327.65, the S&P 500 lost 17.55 points, or

0.30%, to 5,527.04 and the Nasdaq Composite lost 56.06

points, or 0.32%, to 17,813.99.

U.S. megacaps were mixed. Nvidia ( NVDA ) lost around 1%,

while Apple ( AAPL ) and Alphabet stayed broadly

positive.

U.S.-listed shares of Taiwan Semiconductor Manufacturing

extended earlier losses to shed around 3.5% on the day.

Microsoft ( MSFT ) was down 0.3% after the cloud disruption.

DOLLAR RECOVERS

In currency markets, the dollar made some headway after

hitting a four-month low in the middle of the week.

The dollar index, which measures the greenback

against a basket of currencies, gained 0.17% to 104.32, with the

euro down 0.1% at $1.0885.

It is set for a 0.2% gain for the week after two weeks of

losses, supported by this week's firm economic data and Friday's

jitters about the outage, even as conviction grows that the Fed

could cut interest rates in September.

The euro slipped 0.1% to $1.0885, having dipped the

previous session after the European Central Bank kept rates on

hold as expected, but left the door open to a September cut. The

ECB downgraded its view of the euro zone's economic prospects.

Two ECB policymakers on Friday backed further interest-rate

cuts, expressing greater confidence that inflation was heading

to the central bank's goal next year.

U.S. Treasury yields rose, with little to drive market

reaction as investors waited on fresh data next week.

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

4.5 basis points to 4.233%, from 4.188% late on Thursday.

In commodities, U.S. crude lost 1.03% to $81.97 a

barrel and Brent fell to $84.27 per barrel, down 0.99%

on the day.

In cryptocurrencies, bitcoin gained 3.01% to

$65,740.00, while spot gold lost 1.63% to $2,405.11 an

ounce.