Stocks fall, dollar firms on profit concerns

LONDON (Reuters) - World stocks slipped toward this week's 6-year low on Friday and the dollar hit a three-month high against major currencies as concerns intensified about corporate profits in pharmaceutical firms and banks.

Emerging market stocks also fell even after global development banks launched a coordinated two-year plan to lend up to 25 billion euros to shore up banks and businesses in crisis-hit eastern and central Europe.

Healthcare companies fell broadly on Wall Street on profit concerns as U.S. President Barack Obama's budget proposals for 2010 takes direct aim at the sector to help fund an overhaul of the U.S. healthcare system.

Banking shares came under pressure again with Lloyds Banking Group falling more than 10 percent at one point after it unveiled a massive loss for 2008 and said it had not yet finalized details of its plan to put billions of pounds of assets into a UK government-backed insurance scheme.

"Despite the fact that shares are extremely cheap on every parameter, confidence of investment sentiment is extremely low," Jeremy Batstone-Carr, head of private client research at Charles Stanley.

"My suspicion is that confidence will begin to improve once some indication emerges from the macro backdrop that a corner has been turned." MSCI world equity index fell 0.7 percent, closing in on the six-year low set Tuesday. The index is down more than 9 percent this month.

The FTSEurofirst 300 index fell 2 percent.

"There's just one problem after another, and we'll simply have to work through them one by one," said Katsuhiko Kodama, senior strategist at Toyo Securities in Tokyo.

Emerging stocks were down 0.8 percent. The action plan by the World Bank, European Bank for Reconstruction and Development and European Investment Bank came as European Union members prepare to discuss aid to banks at an emergency summit on Sunday.

U.S. crude oil fell 2.9 percent to $43.90 a barrel.

The March bund futures rose 38 ticks.

The dollar rose to a three-month high against a basket of major currencies. The yen rose 0.9 percent to 97.59 per dollar.