Global stocks, dollar fall; U.S. Treasury yields hit 5-month highs

By Richard Leong

NEW YORK (Reuters) - Long-term U.S. Treasury yields hit their highest level of 2015 on Tuesday as investors reassessed the chances of a September interest rate hike by the U.S. Federal Reserve, while global stock prices fell on uneasiness about U.S. and Asian growth.

The stand-off between Greece and its creditors also curbed appetite for equities.

"Greece is not going to get sorted out any time soon. At the moment, I'm more bearish than bullish and I would sell on any stock market rally," said Terry Torrison, managing director at Monaco-based McLaren Securities.

The dollar fell as data showed the United States posted its biggest monthly trade gap in nearly 6-1/2 years in March, raising bets the Federal Reserve might not hike interest rates in 2015. The news was mitigated by a surprise improvement in a private gauge on the services sector in April.

Oil prices reached fresh 2015 highs as protests disrupted exports to an eastern Libyan port, while gold gained on safety bids stemming from anxiety in other markets.

The Dow Jones industrial average fell 101.3 points, or 0.56 percent, to 17,969.1, the S&P 500 was down 16.99 points, or 0.8 percent, to 2,097.5 and the Nasdaq Composite declined 64.48 points, or 1.29 percent, to 4,952.44.

The MSCI world equity index, which tracks shares in 45 nations, fell 2.78 points or 0.63 percent, to 436.25.

The pan-European FTSEurofirst 300 equity index fell 1.4 percent at 1,557.70, erasing an earlier gain spurred by an almost 7 percent jump in UBS shares.

Tokyo's Nikkei eked out a 0.06 gain despite data from China, Taiwan and Japan which showed factory activity contracting.

While worries intensified about Asia's biggest economies, the European Commission said euro zone economic growth would be stronger than previously expected this year.

Prices of major government bonds declined in an ongoing market pullback stemming from less pessimism about Europe. Safe haven German Bunds' 10-year yields touched 0.535 percent, the highest since January.

This has also led investors to dump U.S. Treasuries, sending 30-year bond yield to 2.934 percent, the highest in five months.

In the currency market, the mixed U.S. data spurred selling in the dollar, especially against the euro. The single currency was up 0.45 percent against the greenback at $1.1190.

Brent crude was last up $1.54, or 2.32 percent, at $67.99 a barrel. U.S. crude was last up $1.81, or 3.07 percent, at $60.74 per barrel.

Spot gold prices rose $8.23 or 0.69 percent, to $1,195.93 an ounce.

(Reporting by Lionel Laurent, Sudip Kar-Gupta in London)