* World MSCI stock index down for second day
* EU slashes euro zone growth outlook
* Germany's DAX leads swoon in Europe equities
* Trump, Xi unlikely to meet before March deadline -U.S. officials
* Dollar climbs for 6th session, euro slips
By Lewis Krauskopf
NEW YORK, Feb 7 (Reuters) - Stocks around the world pulled back sharply on Thursday on fears of a global growth slowdown spreading to Europe and renewed worries about any near-term resolution of U.S.-China trade tensions, while the U.S. dollar strengthened for a sixth session.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed 1.28 percent, on pace for its biggest one-day drop in more than a month as it receded from two-month highs reached earlier in the week. The pan-European STOXX 600 index .STOXX lost 1.49 percent and Wall Street's S&P 500 benchmark index .SPX dropped 1.5 percent.
The European Commission sharply cut its forecasts for euro zone economic growth this year and next on expectations the bloc's largest countries will be held back by global trade tensions and domestic challenges. Germany's DAX stock index tumbled 2.7 percent as industrial output in Europe's biggest economy unexpectedly fell in December for the fourth consecutive month. assets gained, including Japan's yen JPY= and gold XAU= .
"Even though we are in the midst of earnings season, the macro environment is really impacting global risk sentiment," said Katie Nixon, chief investment officer at Northern Trust (NASDAQ:NTRS) Wealth Management in Chicago.
"Fears of a more dramatic slowdown in Europe are being joined with the fears around a slowdown in China. And the broad slowdown in global trade is having a direct impact on some of these economies and some of the results."
Equities declined more sharply following heightened concerns about U.S.-China trade relations, including news that U.S. President Donald Trump and Chinese President Xi Jinping are unlikely to meet before their countries' March 1 deadline to reach a trade deal, according to two U.S. administration officials and a source familiar with the negotiations. kick-started us to the downside this morning and then there was follow-through from the Trump headline and all of a sudden you have an overdue sell-off on your hands," said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.
On Wall Street, the Dow Jones Industrial Average .DJI fell 347.6 points, or 1.37 percent, to 25,042.7, the S&P 500 .SPX lost 39.71 points, or 1.45 percent, to 2,691.9 and the Nasdaq Composite .IXIC dropped 122.84 points, or 1.67 percent, to 7,252.45.
U.S. regional lender BB&T Corp (NYSE:BBT) BBT.N will buy rival SunTrust Banks Inc (NYSE:STI) STI.N for about $28 billion in stock, the biggest bank deal in about a decade. Shares of both banks rose. downgrade in European growth expectations filtered into currency markets, with the euro EUR= down 0.08 percent to $1.1351.
The dollar index .DXY , which weighs the greenback against a basket of six currencies, rose 0.08 percent, firming for a sixth session in a row.
The dollar's gains come despite the Federal Reserve's dovish shift on interest rates last week.
"When analyzing a currency's exchange rate, it should be relative to a peer. So far it seems none of these peers have a competitive advantage, making the dollar the less unloved currency," Hussein Sayed, strategist at forex broker FXTM, said in a note.
U.S. Treasury yields fell for a third straight session. Benchmark U.S. 10-year notes US10YT=RR last rose 9/32 in price to yield 2.6716 percent, from 2.704 percent late on Wednesday.
Oil fell as the market confronted concerns that global demand growth would lag in the coming year. crude CLcv1 fell 3.41 percent to $52.17 per barrel and Brent LCOcv1 was last at $60.99, down 2.71 percent on the day.
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