Equities and dollar slump as global growth woes multiply

NEW YORK (Reuters) - Wall Street slumped on Thursday as anxieties about global economic growth smothered a short-lived, Federal Reserve-sparked rally in equity markets around the world.

The dollar gave up some gains from a remarkable three-month run-up and U.S. benchmark bond yields touched one-year lows as investors shrugged off encouraging U.S. jobless data.

Oil prices, deeply affected by the dollar's value, tumbled to near a two-year low.

Energy stocks were big losers on Wall Street, where leading indices were off sharply at mid session. The MSCI index of world stocks was off 0.9 percent at 407.53.

The Dow Jones industrial average fell 311.82 points, or 1.83 percent, to 16,682.4, the S&P 500 lost 36.73 points, or 1.87 percent, to 1,932.16 and the Nasdaq Composite dropped 83.10 points, or 1.86 percent, to 4,385.49.

The S&P Energy Index was down 3.5 percent on Thursday, a day after investors gave the U.S. stock market its best day of the year as Fed meeting minutes suggested the central bank would not rush interest-rate hikes.

European shares hit a fresh two-month low as German exports fell 5.8 percent in August, the worst decline since January 2009. The data from Europe's biggest economy fed anxieties about recession in the euro zone.

Brent oil fell below $90 a barrel. Prices have been hurt by a supply glut and concerns about global economic growth and are now down 20 percent from June.

Brent for November delivery was last down $1.16 at $90.22. U.S. November crude lost $1.48 to $85.83.

"Supply is strong, inventories are high and demand in Europe is terrible," said Michael Hewson, head analyst at CMC Markets.

The dollar dropped to a three-week low against the yen as investors took profit and pared back bullish bets on the greenback. The dollar was last off 0.20 percent to 107.92 yen.

The Fed minutes showed officials were concerned about the impact of a stronger dollar on the profits of companies with an international presence, and about lackluster global growth, as they sought an eventual exit from record low rates.

The Fed was sending a warning shot to dollar bulls, who had lifted the greenback each week for three months, according to Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in Greenwich, Connecticut.

"The Fed notes that the stronger dollar, which could automatically depress demand for U.S. exports, is already depressing commodity prices that in turn is likely to contain inflationary pressures," Wilkinson told clients.

Spot gold rose to its highest since Sept. 23 at $1,233.20 an ounce early on Thursday and was trading up 0.3 percent at $1,224.86.

U.S. long-dated and benchmark Treasuries yields hit their lowest levels in over a year.

Yields on 30-year Treasury bonds hit 3.029 percent, their lowest since May 2013, while benchmark 10-year yields hit 2.279 percent, lowest since June 2013.

Benchmark 10-year U.S. Treasury notes were last off 1/32 in price to yield 2.33 percent. U.S. 30-year Treasury bonds were last off 4/32 to yield 3.068 percent.

(Additional reporting by Gertrude Chavez-Dreyfuss, Sam Forgione, Herbert Lash and Ryan Vlastelica in New York, and Marc Jones in London; Editing by Nick Zieminski)