--European stocks plunge; euro falls too --Greece suspends talks with the troika of international agencies --Unwelcome Greek developments renew debt fears --Investors await U.S. nonfarm payrolls data By Toby Anderson & Michele Maatouk Of DOW JONES NEWSWIRES LONDON (Dow Jones)--European stocks plunged Friday along with the euro, as worries about Greece's ability to meet its budget-deficit targets hit investors who are already jittery about the euro-zone debt crisis. At the same time, investors were wary of assuming more risk ahead of the release of U.S. nonfarm payrolls. Although the troika of international agencies reviewing Greece's compliance with its economic adjustment program claimed the indebted country was making "good progress," the fact the talks were suspended left investors cold. The delegation of European Union, International Monetary Fund and European Central Bank officials will now return to Greece mid-September, once the Greek authorities have completed "technical work." By 1055 GMT, the benchmark Stoxx Europe 600 index was down 2.0% at 234.08. Frankfurt's DAX was down 2.9% at 5565.16, Paris's CAC-40 was 2.6% lower at 3180.05, and London's FTSE 100 was 1.9% lower at 5316.81. In Athens, the ASE index lost 3.8% to 893.72. The euro also suffered on the news from Greece, particularly against the safe-haven Swiss franc, and by 1055 GMT, stood at CHF1.1122 from CHF1.1343 late Thursday in New York. The single currency also traded at $1.4252, from $1.4260. The Swiss franc also gained against the dollar, which was at CHF0.7803 from CHF0.7949. Investors, ditching equities and other risky investments, fled to the safety of gold and bunds, pushing the yellow metal up $24.50 to $1,853.30 per troy ounce, from its New York settlement on Thursday. The September bund futures contract was up 72 ticks at 136.02. As far as peripheral spreads were concerned, the 10-year Italian bond yield rose nine basis points to 5.22%, widening the yield spread over similar-dated German bunds to a near one-month high of 317 basis points. The 10-year Spanish/German yield spread widened 10 basis points to 302 basis points, and the 10-year Greek/German yield spread widened by 15 basis points to 1549 basis points. The cost of insuring European sovereign debt against default also drifted higher, with the Sovx Western Europe Index of 15 sovereigns widening by seven basis points from Thursday's close. Aside from news surrounding Greece, this month's U.S. payrolls report has taken on even more significance than usual, as the outcome could trigger the Federal Reserve's next move with regard to monetary policy. The consensus is for nonfarm payrolls to show an 80,000 increase in August, following a 117,000 rise the previous month. Nonfarm payrolls and the unemployment rate are due at 1230 GMT. "Markets are gearing themselves up for a further round of monetary stimulus, and this presents an odd backdrop, as weak data boosts sentiment by providing an incremental boost to the chances of more QE in the U.S. and U.K., and potentially, to looser monetary policy elsewhere," said ING. Doubts over global growth prospects also weighed, after the White House downgraded its outlook for the U.S. economy, forecasting unemployment could average 9% in 2012. It also predicted slower-than-expected growth for the next several years. These concerns dragged down oil; October Nymex crude oil futures were down 94 cents at $87.98 per barrel at 1105 GMT. In terms of sectors, banks featured among the worst performers, following a New York Times report stating the federal agency that overseas Fannie Mae and Freddie Mac is planning to file a suit against over a dozen major banks over the alleged misrepresentation of mortgage-backed securities. At 1105 GMT, the Stoxx Europe 600 banks index slipped 2.8% to 140.41. -By Toby Anderson, Dow Jones Newswires; +44-20-7842-9352; toby.anderson@dowjones.com

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