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Equities on Wall Street slipped in light volume on Tuesday on growing concerns over slower economic growth and worries about the euro zone debt crisis.

The S&P 500 closed at its lowest level in over a month and ended below its 50-day moving average for a second straight day.

Recent weak economic data, including soft manufacturing data from the Atlantic region and disappointing New York and Philadelphia Fed manufacturing surveys, pointed to a slowdown in the pace of economic growth.

Investors are likely to look for further evidence when U.S. durable goods orders for April is released at 8:30 a.m. EDT.

Durable goods orders are expected to have dropped 2.2 percent in April, a sharp correction from the gain of 4.1 percent the month before weighed down by weak aircraft orders.

Other data due includes home price numbers due at 10 a.m. EDT.

On the earnings front, Costco Wholesale Corp (COST.O) posted a higher quarterly profit as it sold more gasoline and got a boost from stronger foreign currencies.

Other quarterly earnings set for release include Computer Sciences Corp (CSC.N), seen reporting earnings per share (EPS) of $1.11 against $1.66 a year ago, and Polo Ralph Lauren (RL.N), seen reporting EPS of $0.79 against $1.14 a year ago.

The U.S. Treasury made a small profit when it sold a portion of its shares in American International Group Inc (AIG.N) on Tuesday, but it was unclear how its investment in the beleaguered insurer will ultimately fare. The shares were sold at $29 a piece.

U.S. regulators launched one of the biggest ever crackdowns on oil price manipulation on Tuesday, suing two well-known traders and two trading firms owned by Norwegian billionaire John Fredriksen for allegedly making $50 million by squeezing markets in 2008.

GE Capital (GE.N) is selling its A$5 billion ($5.3 billion) Australia and New Zealand mortgages books to Pepper Homeloans as concerns rise over a softening of the Australian housing market and rising cost of funds.

Chrysler on Tuesday paid back $7.6 billion in U.S. and Canadian government loans from its 2009 bailout, a move that allows the U.S. automaker to distance itself from an unpopular bailout and deepen its ties with Fiat (FIA.MI)

On the economic front, the OECD said global economic recovery is on track, helped by a stronger United States, but threats ranging from high oil prices to European sovereign debt crises could yet combine to create a bout of stagflation.

France's finance minister is set to declare on Wednesday she wants to be the next head of the IMF even though big emerging economies have decried Europe's "obsolete" grip on the top job.

In Europe, the pan-European FTSEurofirst 300 .FTEU3 index of top shares edged up 0.1 percent, rebounding from falls at the open, investors bought beaten-down banking stocks.

(Editing by Louise Heavens)

Asian stocks also fell, tracking weakness on Wall Street as firmer commodity prices were offset by lingering concerns over the economic outlook for the United States as well as euro zone debt woes.

The euro, which had rallied after better-than-expected German business confidence data on Tuesday, edged back in the direction of a two-month low of $1.3968 hit earlier this week. It has lost roughly 6 percent since early May.

Europe's policy options to avert a Greek debt default appear to be dwindling fast, casting a pall over the single currency and fueling fears of a chain reaction in other heavily indebted countries in the 17-nation euro area.

"Concern about Spain and Italy might be overblown, but the Greece issue is not going away, and if Greece restructures, that may open the door for Ireland and Portugal." said Brian Dolan, chief strategist at Forex.com.

The U.S. dollar .DXY rose 0.3 percent against a basket of major currencies.

A Greek debt default would hurt other peripheral euro zone states and could push Portuguese and Irish debt into junk territory, Moody's said on Tuesday, warning it would classify most forms of restructuring as a default.

As investors reduced exposure to riskier assets, MSCI's index of Asia-Pacific stocks outside Japan fell 0.7 percent while Japan's benchmark Nikkei slipped 0.46 percent.

Oil slid as the dollar rebounded against the euro, giving up some of its 2 percent rise overnight after Goldman Sachs raised its price forecasts for Brent crude. Brent crude for July delivery fell 0.64 percent to $111.81 a barrel, having swung between $109.50 and $112.65.

Euro-denominated gold hit a record high after the euro edged back toward a two-month low on euro zone debt fears.

Spot gold fell to $1,524.20 an ounce after rising as high as $1,527.45 on Tuesday, its strongest since May 4. Bullion was still below a lifetime high around $1,575 an ounce struck in early May.

The Treasury sold 200 million shares of AIG at $29 per share, a slight discount from their closing price and not far above the $28.73 average price the Treasury will need to recoup its full investment in the company.

The $8.7 billion total sale, which included 100 million shares sold by AIG itself, was also far smaller than the $10 billion to $20 billion banking sources had been throwing around, and hinted at a persistent lack of investor interest in the firm despite its apparent strides.

Treasury acquired the shares under extreme duress, as the potential failure of the insurance giant threatened to exacerbate an already severe financial crisis in late 2008.

Tuesday's sale represented the first step in removing generous support for the insurance behemoth, which totaled over $180 billion in several installments.

Treasury will remain by far the majority shareholder of AIG, but its holdings now comprise 77 percent of the total, down from 92 percent before the sale.

"We're hopeful that we can recover all the investment that we made," Tim Massad, the Treasury's acting secretary for financial stability said during a conference call with reporters.

But he added that the extent of losses -- or profits -- would not be known until Treasury fully exits its stake.

Massad said there is no specific timetable for the sale of remaining shares. He added that, following an agreed "lock-up" period of 120 days, the Treasury would continue to reduce its holdings "in an orderly fashion."

"We're going to sell in a way to maximize value to the taxpayer," Massad said.

Treasury raised $5.8 billion on Tuesday. All told, it needs to raise $47.5 billion to break even on the equity portion of its investment in AIG.

WHO COULD FORGET?

AIG's share sale is important for the U.S. government, which is trying to sell out of multiple investments it made in companies during the financial crisis.

The bailouts were highly unpopular, especially after it became known that top managers in the very same AIG unit that drove the company into a rut had continued to pay themselves handsome bonuses even while receiving taxpayers' help.

The AIG share sale is also a key moment for Chief Executive Officer Robert Benmosche. Benmosche, who became AIG's fifth CEO in less than five years in August 2009, halted a plan to break the company up in a fire sale of its parts.

He instead embarked on a revival centered around two core businesses: U.S. life insurer SunAmerica and global property insurer Chartis. Other businesses were sold, taken public or left to operate with a view toward an eventual sale.

AIG was literally minutes from bankruptcy when it was rescued in September 2008. The various iterations of the rescue package ended up being worth $182 billion, dwarfing various other bailouts around the world during the financial crisis.

The question now is how quickly the U.S. government exits its investment and whether it breaks even.

Benmosche has said he expects the government to be out of its AIG position by mid-2012. Fitch Ratings said recently its own models for the company assume the government is out by the end of 2012.

(Additional reporting by Ben Berkowitz; Editing by Gary Hill)

The 300 million share offering, which includes shares sold by Treasury as well as AIG, priced at $29 and raised $8.7 billion, a source familiar with the situation said on Tuesday.

For Treasury to break even on its investment, it needs to sell its 1.7 billion shares for an average price of $28.72.

The offering, in which Treasury is selling 15 percent of its AIG stake, is important for the U.S. government as it tries to sell off investments it made in multiple companies during the financial crisis.

The AIG share sale is also a key moment for Chief Executive Officer Robert Benmosche. Benmosche, who became AIG's fifth CEO in less than five years in August 2009, halted a plan to break the company up in a fire sale of its parts.

He instead embarked on a revival centered around two core businesses: U.S. life insurer SunAmerica and global property insurer Chartis. Other businesses were sold, taken public or left to operate with a view toward an eventual sale.

AIG was literally minutes from bankruptcy when it was rescued in September 2008. The various iterations of the rescue package ended up being worth $182 billion, dwarfing various other bailouts around the world during the financial crisis.

The question now is how quickly the U.S. government exits its investment and whether it breaks even.

Benmosche has said he expects the government to be out of its AIG position by mid-2012. Fitch Ratings said recently its own models for the company assume the government is out by the end of 2012.

Either way, the terms of the recapitalization deal that closed earlier this year include penalties if the government's investment is not closed out by 2013. Those penalties include the potential for forced asset sales.

The Treasury sold 200 million shares in the offering on Tuesday, with AIG selling an additional 100 million shares.

(Reporting by Clare Baldwin and Ben Berkowitz; Editing by Carol Bishopric, Gary Hill and Tim Dobbyn)

The Government Accountability Office said that as of September 30, 2010, the total bill for unpaid taxes, including interest and penalties, was $330 billion.

By law the federal government can make grants to entities that owe taxes, so some of the outstanding bills were racked up before the stimulus plan was passed.

"We've known for some time that there's a significant tax gap in this country, and in some cases we've found that government contractors are contributing to the problem," said Senator Tom Carper, a Democrat from Delaware, in a statement.

He added that "those who fail to pay their fair share... force their fellow Americans who play by the rules to pay more in taxes."

Last month, the office reported that as of September 30, 2009, 3,700 contract and grant recipients owed $750 million in unpaid taxes. That represented nearly 5 percent of the 80,000 funding recipients.

The $819 billion stimulus plan, a combination of spending and tax measures intended to jolt the U.S. economy out of the longest and deepest downturn since World War Two, appropriated $275 billion for grants, contracts and loans. As of March 25, about $191 billion had been paid out, the GAO said.

Because of the way the Internal Revenue Service tracks taxes owed and paid, the estimate of unpaid taxes is likely too low, it said.

The GAO said it had uncovered 15 cases in which recipients had not sent withheld payroll taxes to the Internal Revenue Service, a violation that totaled $40 million.

In one example, a nonprofit organization did not give the IRS payroll taxes from the middle to late 2000s and defaulted on agreements to pay the money in installments. Finally, the IRS filed tax liens against the organization to collect the more than $2 million it owed.

The group received awards from the stimulus plan of more than $1 million for social services, the GAO said.

Of the plan's many moving parts, which included fund transfers to states and aid for the unemployed, contracts and grants were targeted mostly at direct job creation.

According to the federal government's web site, www.recovery.gov, from January through March, recipients reported that they had created 571,383 jobs through contracts, grants and loans. The website showed almost $265 billion had been awarded.

(Reporting by Lisa Lambert; Editing by Dan Grebler)