World stock markets retreat for second day on growth worries

By Herbert Lash

NEW YORK (Reuters) - Global equity markets fell for a second straight day on Wednesday on mostly weak economic data and metals prices slipped on renewed signs of a downturn in global growth.

Lackluster manufacturing data from around the world sparked the selling, notably Chinese factory activity shrinking for the 14th straight month and British output at three-month lows.

Economic growth in the euro zone will be slow but steady in the second quarter, surveys indicated, underscoring concerns about the vulnerability of the euro zone's upturn.

Retail sales also fell across the euro zone as a whole in March, adding to the cautionary tone.

The price of copper, often viewed as a key growth barometer, fell due to selling triggered by a stronger dollar and manufacturing surveys from around the world.

Benchmark copper on the London Metal Exchange was last bid down 1.0 percent at $4,869.00 a tonne. A higher U.S. currency makes dollar-denominated commodities more expensive for non-U.S. firms.

MSCI's all-country world index of stock performance in 46 countries fell 0.98 percent, while the pan-European FTSEurofirst 300 index was down 1.2 percent.

"We may have the odd move higher, but we remain in a longer-term bear market," said Andreas Clenow, chief investment officer of ACIES Asset Management in Zurich, Switzerland.

On Wall Street stocks fell even as the vast U.S. services sector expanded in April as new orders and employment accelerated, bolstering views that economic growth would rebound after almost stalling in the first quarter.

However, other data showing private employers hired the fewest number of workers in three years in April dimmed the U.S. economic outlook.

The Dow Jones industrial average fell 87.8 points, or 0.49 percent, to 17,663.11. The S&P 500 slid 13.48 points, or 0.65 percent, to 2,049.89 and the Nasdaq Composite lost 35.13 points, or 0.74 percent, to 4,728.10.

U.S. Treasury yields fell to their lowest in two weeks, with the price of the benchmark 10-year Treasury note rising 2/32 to yield 1.7928 percent.

The dollar index, a basket of six major trading currencies, rose 0.3 percent to 93.223, and the dollar strengthened against the yen 0.35 percent to 106.96.

Oil prices pared gains as a bigger-than-expected gain in U.S. crude stocks tempered concerns about reduced production in Canada's oil sands region due to a wildfire.

U.S. crude stocks grew by 2.8 million barrels in the lastweek, versus expectations of a 1.7 million barrel build, EnergyInformation Administration data showed. Gasoline stocks alsoposted a surprise increase.

Brent crude fell 5 cents at $44.92 a barrel, while U.S. crude rose 17 cents to $43.82 a barrel.

(Reporting by Herbert Lash; Editing by Chizu Nomiyama)