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Stocks slide after sour US housing data

Disappointing U.S. housing data dashed investors' hopes for further evidence of a stronger economy than forecast Wednesday, putting a damper on the global equity rally and leading the dollar lower.

U.S. home resales unexpectedly fell in February and the supply of properties on the market rose, underscoring the weak state of the housing market.

However, the pace of sales in January was revised up, suggesting housing demand and price were at least stabilizing.

Wall Street retreated from early gains while stocks in Europe slipped further on the data.

"We're not seeing any pricing power which suggests it's still a weak market. But prices are not dropping as sharply as they were several years ago. We are seeing some signs of stability in pricing," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.

U.S. Treasury debt prices rose as investors took advantage of a recent gain in yields to do some bargain hunting, although price losses were limited by expectations that a better economic picture would continue to erode the value of government debt.

Treasuries prices plunged last week and yields solidly broke above ranges that had held for four and a half months, as recent data has pointed to an economic recovery that is gaining steam, lowering expectations of further economic stimulus from the Federal Reserve.

"People are starting to price out the end of Fed support," said William Larkin, fixed income portfolio manager at Cabot Money Management in Salem, Massachusetts. "Over time, it is likely that as the economy recovers and we get stronger and stronger economic data, that yields will continue to rise."

Brent oil traded near break-even of $124.12 a barrel. U.S. light sweet crude oil rose 33 cents to $106.40 a barrel.

Reuters contributed to this report.