Stocks, bond yields fall on Greece, U.S. data

NEW YORK (Reuters) - Global equity markets and bond yields fell on Friday, weighed by data that showed the U.S. economy contracted in the first quarter and by conflicting signals from Greece's debt talks.

European shares also fell on data showing private loan growth in the euro zone stalled in April, while the separate report on U.S. gross domestic product also indicated after-tax corporate profits declined 8.7 percent in the first quarter.

Conflicting reports that Athens was close to clinching a reforms-for-cash deal with its creditors pushed German 10-year bond yields down 3 basis points to 0.50 percent.

U.S. debt yields also fell, with the 30-year U.S. Treasury falling to its lowest in three and a half weeks, at 2.84 percent, while benchmark U.S. 10-year yields also hit a three-and-a-half-week low at 2.097 percent.

The U.S. government slashed its GDP estimate to show the economy shrank at a 0.7 percent annual rate in the first quarter instead of the 0.2 percent growth it estimated in April. The economy appears poised for its worst first-half performance since 2011.

Adam Sarhan, chief executive of Sarhan Capital in New York, said the weak growth data on Friday removed the imminent threat of the Federal Reserve raising interest rates, which should be supportive of stocks.

"So far, the Fed's been data dependant and the data including today's GDP numbers on average continues to be weaker than expected," Sarhan said.

MSCI's all-country world index <.MIWD00000PUS> of the stock performance in 46 countries fell 0.49 percent. The pan-European FTSEurofirst 300 <.FTEU3> shed 1.25 percent to 1,595.10 points by 1407 GMT.

Wall Street was lower in morning trading after the GDP data and as corporate profits declined the most in a year.

The Dow Jones industrial average <.DJI> fell 132.63 points, or 0.73 percent, to 17,993.49. The S&P 500 <.SPX> slid 12.95 points, or 0.61 percent, to 2,107.84 and the Nasdaq Composite <.IXIC> lost 29.72 points, or 0.58 percent, to 5,068.26.

U.S. 10-year notes rose 4/32 in price to yield 2.1144 percent.

Oil surged more about 3 percent as a rally in the dollar faded and after data from a day ago showed four straight weekly draws in U.S. stockpiles.

North Sea Brent was up $2.15 at $64.73 a barrel, and U.S. crude rose $1.75 to $59.43 a barrel.

The dollar index <.DXY> was up 0.07 percent at 97.035 and remained on track for a rise in May, resuming a string of nearly uninterrupted monthly gains that began last July.

The dollar was off 0.2 percent at $1.0968 against the euro, which, unlike bonds and stocks, was benefiting from hopes a deal may soon be reached between Greece and its creditors.

The dollar rose 0.11 percent to 124.08 yen .

(Editing by Bernadette Baum)

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