(Removes reference to Nasdaq being unchanged)
* Shares fall on weak China data, RBA rate cut
* S&P energy index falls more than 2.3 pct
* European shares fall to 3-week lows
* Benchmark Treasury yields hit nearly two-week lows
* Yen hits 18-month high vs dollar
By Sam Forgione
NEW YORK, May 3 (Reuters) - Stock markets worldwide fell on
Tuesday after weak Chinese factory data and a surprise rate cut
by Australia's central bank unnerved investors, sending
benchmark Treasury yields to nearly two-week lows.
Activity at China's factories shrank for the 14th straight
month in April as demand stagnated, a private survey showed. The
data contributed to a drop in oil prices on demand worries,
given the country's status as a major oil importer.
U.S. shares gave back Monday's gains. The drop in oil prices
helped push the S&P 500 energy index .SPNY down more than 2.3
percent, making it the leading decliner among the 10 major S&P
sectors. Financial shares were also a top decliner, with the S&P
financial index down more than 2 percent.
The Reserve Bank of Australia cut interest rates to a record
low of 1.75 percent, the first easing in a year. The cut added
to investors' uneasiness surrounding central banks' attempts to
boost growth through aggressive policy easing.
"The negative news out of China, and Australia having to
stimulate its economy again, is spooking the market today," said
Peter Cardillo, chief market economist at First Standard
Financial in New York.
European shares fell to three-week lows, with Germany's
Commerzbank CBKG.DE leading decliners after a slump in
profits, while the weak Chinese factory data pushed down mining
companies. European banking shares broadly .SX7P slumped
around 3.5 percent.
The Chinese economic data and RBA rate cut fanned worries
about the health of the global economy, in turn pushing yields
lower and boosting prices on safe-haven U.S. government debt.
MSCI's all-country world equity index .MIWD00000PUS was
last down 5.12 points, or 1.27 percent, at 399.05.
The Dow Jones industrial average .DJI was last down 190.49
points, or 1.06 percent, at 17,700.67. The S&P 500 .SPX was
down 23.75 points, or 1.14 percent, at 2,057.68, and the Nasdaq
Composite .IXIC was down 59.43 points, or 1.23 percent.
Europe's broad FTSEurofirst 300 index .FTEU3 dropped 1.54
percent at 1,321.59.
Yields on U.S. Treasuries maturing in five, 10, and 30 years
hit their lowest levels since April 20, with benchmark 10-year
yields US10YT=RR hitting a session low of 1.784 percent. Two-
and three-year yields hit their lowest levels in more than two
weeks, at 0.742 percent and 0.891 percent, respectively.
"I think people are realizing monetary policy is at its
maximum point ... and growth doesn't look like its
accelerating," said Priya Misra, head of global rates strategy
at TD Securities in New York.
In addition to concerns over demand, oil prices fell as
rising output from the Middle East and North Sea renewed
concerns about global oversupply. Brent crude LCOc1 was last
down 2.12 percent at $44.86 a barrel. U.S. crude CLc1 was last
down 2.55 percent, at $43.64 per barrel.
The dollar was last down 0.19 percent against the yen at
106.19 yen, near the 18-month low of 105.55 yen JPY= . The yen
gained on doubts the Bank of Japan would intervene to stem its
dramatic rise, which has undermined attempts to reflate the
developed world's third-biggest economy.
Spot gold prices XAU= were last down 0.42 percent,
at$1,285.81 an ounce.
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Shanghai CSI 300 and global effects interactive https://t.co/YqIYLIbInP
Chinese A-shares vs developed and emerging stocks http://link.reuters.com/rac25w
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