* Fed minutes cool expectations for Sept rate liftoff
* German stocks on track for worst month since 2011
* Dow and S&P 500 back into negative territory for the year
(Adds close of U.S. markets, oil settlement prices)
By Chuck Mikolajczak
NEW YORK, Aug 20 (Reuters) - World stock markets tumbled and
Brent oil prices remained under pressure on Thursday as another
slump in the equity market of China, the world's No. 2 economy,
stoked concerns about sluggish global growth.
Wall Street was also weighed down by a drop in finance
stocks and fell for a third straight session as expectations
cooled for a U.S. interest rate hike in September, which also
kept the dollar lower.
The declines in equities put the S&P 500 back into negative
territory for the year. The Nasdaq suffered its biggest daily
percentage drop since April 10, 2014.
Stocks in China tumbled again, with both the Shanghai and
Shenzhen markets .SSEC .CSI300 down more than 3 percent.
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Investors have been concerned a weak currency and slowing
economy may spur further capital outflows.
"The largest issue is certainly the fact that we don't know
how much the Chinese economy is slowing," said Art Hogan, chief
market strategist at Wunderlich Securities in New York.
FINANCIALS HIT
In a broad selloff on Wall Street, in which each of the 10
major S&P sectors lost ground, financials .SPSY dropped 2.1
percent. The drop comes in the wake of minutes released
Wednesday from the Federal Reserve's July meeting, which cooled
expectations the Fed will start to raise interest rates as early
as September, the first such move in nearly a decade.
A 6-percent drop in Disney DIS.N to $100.20 also weighed
heavily. Bernstein downgraded the stock along with Time Warner
TWX.N , down 5 percent to $73.91, to lead media stocks lower,
citing massive structural upheaval in the industry.
The Dow Jones industrial average .DJI fell 358.04 points,
or 2.06 percent, to 16,990.69, the S&P 500 .SPX lost 43.88
points, or 2.11 percent, to 2,035.73 and the Nasdaq Composite
.IXIC dropped 141.56 points, or 2.82 percent, to 4,877.49.
MSCI's all-country world stock index .MIWD00000PUS lost
1.5 percent after touching a 7-month low.
The Fed minutes showed officials in broad agreement that the
U.S. economy was nearing the point where interest rates should
move higher. It also noted lagging inflation and that a weak
global economy posed too big a risk to commit to a rate
"liftoff."
BROAD DECLINES
The FTSEuroFirst index of 300 leading European shares fell
1.9 percent .FTEU3 and Germany's DAX fell 2.1 percent .GDAXI
to its lowest close since January. That put the DAX down about
7.8 percent so far this month, its worst month in four years.
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS shed 1.5 percent to a two-year
low, marking a fifth consecutive day of losses in what is its
longest losing streak this year.
Benchmark 10-year notes US10YT=RR were last up 16/32 in
price to yield 2.0731 percent from 2.50 percent in mid-June.
The dollar .DXY shed 0.61 percent to 96.028 against a
basket of major currencies amid the diminished rate hike
expectations, touching a 5-week low of 95.724.
U.S. crude oil CLc1 managing to bounce off its support
level near $40 a barrel and from a 6-1/2 year low of $40.21 as
the first hurricane of the 2015 Atlantic season sparked some
concern. The contract settled up 0.8 percent at $41.14, while
Brent crude settled down 1.2 percent at $46.62.
MSCI's emerging market index .MSCIEF set a near four-year
low, having fallen 22 percent from this year's high hit in
April.
Kazakhstan fired the latest salvo in an emerging market
currency war, ditching a trading band on its currency, the
tenge, which lost a quarter of its value.