(Adds close of European markets, updates prices)
* Shares fall on weak China, UK data
* 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 and British factory data rekindled
fears of slowing global growth, 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.
Britain's manufacturing output last month also unexpectedly
shrank to hit its lowest level in three years.
U.S. shares gave back Monday's gains. The drop in oil prices
helped push the S&P 500 energy index .SPNY down 2.5 percent,
making it the leading decliner among the 10 major S&P sectors.
"We are reacting to the negative news overnight from China
and Europe, and investors are waiting for the jobs data," said
Kim Forrest, senior equity research analyst at Fort Pitt Capital
Group in Pittsburgh. She was referring to Friday's U.S. April
employment report.
European shares fell to three-week lows, with Germany's
Commerzbank CBKG.DE leading the decline after a slump in
profits, while the weak Chinese factory data pushed down mining
companies. European banking shares .SX7P ended down 3.68
percent.
The worries about the health of the global economy helped
push yields lower and boost prices on safe-haven U.S. government
debt. A surprise interest rate cut in Australia also raised
concerns about central banks' ability to boost sluggish growth,
which in turn contributed to lower U.S. yields.
MSCI's all-country world equity index .MIWD00000PUS was
last down 4.06 points or 1 percent, to 400.11.
The Dow Jones industrial average .DJI was last down 109.19
points, or 0.61 percent, at 17,781.97. The S&P 500 .SPX was
down 14.21 points, or 0.68 percent, at 2,067.22. The Nasdaq
Composite .IXIC was down 31.09 points, or 0.65 percent, at
4,786.51.
Europe's broad FTSEurofirst 300 index .FTEU3 ended down
1.74 percent at 1,318.91.
Yields on U.S. Treasuries maturing between five and 30 years
hit their lowest levels since April 20, with benchmark 10-year
yields US10YT=RR hitting a session low of 1.782 percent. Two-
and three-year yields hit their lowest levels in more than two
weeks, at 0.742 percent and 0.888 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 2.16 percent, at $44.84 a barrel. U.S. crude CLc1 was
last down 3.15 percent, at $43.37 per barrel.
The dollar was last down 0.13 percent against the yen at
106.26 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= fell 0.39 percent, to $1,286.23 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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