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S&P's parent, McGraw-Hill Companies Inc, said on Tuesday that Deven Sharma, who has served as S&P president since 2007, would step down on September 12, to be succeeded by Citibank chief operating officer Douglas Peterson.

"S&P will continue to produce ratings that are comparable, forward looking and transparent," McGraw-Hill said in a statement, adding that Sharma would work on a strategic portfolio review for the group until leaving at year-end.

The U.S. downgrade on August 5 helped lead to the biggest sell-off in share markets since the global financial crisis three years earlier and sparked a row with the U.S. Treasury over some of the agency's calculations in arriving at the new rating.

The U.S. Justice Department is also investigating the ratings agency over its actions on mortgages leading up to the 2008-2009 crisis, a source familiar with the matter told Reuters last week.

But the Financial Times, which first reported the news of Sharma's resignation, quoted unnamed sources on Tuesday as saying his departure was unrelated to the downgrade or the Justice Department investigation.

The board of McGraw-Hill Companies made the decision to replace Sharma at a meeting where it also discussed its ongoing strategic review on Monday, the Financial Times said.

McGraw-Hill directors and executives met on Monday with Jana Partners LLC, a hedge fund, and the Ontario Teacher's Pension Fund to hear their arguments that the company should be broken up.

(Reporting by Abhishek Takle in BANGALORE and Wayne Cole and Mark Bendeich in SYDNEY; Editing by Ed Davies)

European shares gained ground in early trade on Monday, with defensive sectors such as pharma, telecom and utilities leading the tentative rally following last week's sharp losses.

Oil lost ground, hit by nagging concerns over the economic outlook and on the prospect of a restart of Libyan oil flow into the market as the country's six-month civil war appeared close to an end, with rebel fighters sweeping into the heart of Tripoli and Muammar Gaddafi's forces collapsing.

Spot gold surged more than 1 percent to a third consecutive all-time high on Monday, as investors fled to the safety of bullion amid fears of another U.S. recession and the euro zone's debt crisis.

Efforts to reach a settlement regarding faulty mortgage foreclosure processes have hit a snag as bank executives and U.S. officials debate whether banks should get broad legal protection from state officials for mortgage-related claims, the Wall Street Journal reported on Monday.

About 45,000 striking Verizon Communications (VZ.N) employees are set to go back to work on Tuesday as the telephone company has reached an agreement for bargaining with unions, one of the unions said on Saturday.

Wall Street ended a fourth week of losses on a down note on Friday as most buyers left the market before the weekend on growing fears of another U.S. recession and destabilization in Europe's financial system.

The Dow Jones industrial average .DJI fell 172.93 points, or 1.57 percent, to end at 10,817.65. The Standard & Poor's 500 Index .SPX dropped 17.12 points, or 1.50 percent, to 1,123.53. The Nasdaq Composite Index .IXIC slid 38.59 points, or 1.62 percent, to close at 2,341.84.

(Reporting by Blaise Robinson; Editing by Hans-Juergen Peters)

A bleak global economic outlook has also dampened prices, analysts said.

Libya pumped around 1.6 million barrels per day (bpd), nearly 2 percent of global supply, before the war cut output. Most of Libya's high-quality crude flowed to European refiners, and tightening supply after Libyan exports stopped drove Brent to a two-year high of $127.02 in April.

Brent crude dropped $3.47 to $105.15 per barrel at 3:31 a.m. EDT. U.S. crude fell 24 cents to $82.02 a barrel after dropping to as low as $81.13 earlier. The front-month September U.S. crude contract expires on Monday.

It may take years for output from Libya, the world's 17th-largest oil producer, to fully recover, but rebels hope to resume oil output -- Libya's main revenue earner. Analysts say output of as much as a million bpd could be feasible within months.

Rebels swept into the heart of Tripoli and crowds took to the streets to celebrate what they saw as the end of Muammar Gaddafi's four decades of power, but a government fightback was reported as dawn broke on Monday.

"You will see a relaxation in the supply of crude to the region as a result of what is happening in Libya," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney on how supplies coming back are hitting prices.

Tight supplies of Libya's light sweet crude in Europe helped fuel a widening of the spread between Brent and U.S. WTI crude. The spread is already narrowing and could contract further with the prospect of a resumption in Libyan supplies, Barratt said.

"The important thing to note is that Brent and WTI (spreads) should be trading at $1-$2. The spreads between WTI and Brent should continue to unwind as Libya's light sweet crude is added back to the market."

Concern about the health of global markets kept investors skittish on Monday.

"The longer term view is that WTI is going to fall off," said Tony Nunan, a risk manager with Mitsubishi Corp in Japan.

"The total market looks pretty weak because of what has happened in the last couple of weeks, with economic data now clearly showing that the U.S. and Europe are slowing down."

European stocks extended four weeks of losses on Monday, tracking jittery Asian shares lower, while gold shot to new highs as investors worried about the sluggish U.S. economic outlook and Europe's festering debt crisis.

Market players are awaiting a speech from the U.S. Federal Reserve Chairman Ben Bernanke on Friday at a lodge in Wyoming's Jackson Hole, where policymakers and academics meet once a year to talk shop.

"Bernanke just did what he could to keep interest rates low until 2013. It will be tough to follow that up with a third round of quantitative easing. That could come as a disappointment and could be another bearish element to the market," said Nunan.

Last year, Bernanke used the podium to suggest the Fed could help growth by buying long-term bonds, a prelude to a program enacted soon afterward that did just that.

No grand new plan is expected to be hatched at this year's meeting, but investors are concerned the U.S. may again fall into recession and will be watching closely for any sign of a downgrade in Bernanke's economic outlook.

(Additional reporting by Cho Mee-Young in SEOUL and Randy Fabi in Singapore; Editing by Himani Sarkar)

Spot gold prices hit a record $1,878.39 per ounce as the shaky global outlook prompted investors to move more money into the safe haven, while oil prices tumbled on hopes Libya may resume full output soon as a six-month civil war seemed to be nearing an end.

Japan's Nikkei 225 index was marginally lower by midday, with increasing expectations that Tokyo will intervene in forex markets to weaken the strong yen offsetting growing worries that the U.S. economy may be sliding back into a recession.

Shares elsewhere in the region as measured by the MSCI Asia Pacific ex-Japan index fell almost 1 percent after briefly edging into positive territory earlier in the session.

A similar pattern was seen in S&P 500 futures, which recoiled from early gains to slip 0.2 percent by noon, pointing to more losses in Western markets later in the day.

"Given the economic hurdles faced in Europe and the United States, an upward trend is hard to sustain," said Park Yong-myung, a fund manager at Hanhwa Investment Trust Management.

Khiem Do, head of Asian multi-asset with Baring Asset Management in Hong Kong, said there would be little visibility on the direction of markets until it was clear whether the United States will slide into recession or not.

"The sentiment of markets is very weak at the moment," he said.

MSCI's world stock index fell 0.3 percent, bringing its losses since late July to around 16 percent, closing in on the 20 percent decline that is often used to define a bear market.

A key event this week will be a speech by Federal Reserve Chairman Ben Bernanke on August 26 in Jackson Hole, Wyoming, during which he is expected to provide an economic outlook and hints on how policymakers plan to handle the turmoil in financial markets.

Bernanke used the same event last year to suggest the Fed could help growth by buying long-term bonds, but no major announcements are expected this time.

On Friday, U.S. stocks fell after Hewlett-Packard's weaker outlook and corporate shakeup added to uncertainty for investors after a month of bad surprises ranging from a U.S. credit rating downgrade to a sharp slowdown in world growth.

Markets will also watch data on bond buying by the European Central Bank and debt issuance by European countries such as Italy on Tuesday to see if the euro zone's debt crisis is worsening.

Also on Tuesday, a raft of preliminary manufacturing data will shed light on whether economies from China to the euro zone are continuing to lose momentum.

Brent oil futures fell 2.3 percent to $106.10 a barrel, weighed down by a firmer U.S. dollar and as the months-long conflict in oil-producing Libya appeared to enter its decisive phase, with rebel fighters streaming into the heart of Tripoli.

The dollar index, which tracks the strength of the greenback against a basket of currencies, rose 0.1 percent.

The dollar surged higher against the yen, but later pared some of its gains, with traders citing talk that the spike in the dollar was triggered by bids by a U.S. bank.

The move came as investors were increasingly on edge about the possibility that Japan may intervene to curb yen strength, in the wake of the dollar's drop down to a record low around 75.95 yen late last week.

The dollar was last flat on the day at 76.77 yen, having risen to as high as 77.23 yen earlier.

(Additional reporting by Ayai Tomisawa in Tokyo and Ju-min Park in Seoul; Editing by Kim Coghill)