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Wall St stocks in the red after European index ends off 1%

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Oil prices down again after hitting Dec lows on Tuesday

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U.S. Treasury yields off; dollar falls against Japan's yen

(Updated prices at 2:54 p.m ET/1854 GMT)

By Sinéad Carew and Tom Wilson

NEW YORK/ LONDON, Sept 4 (Reuters) - MSCI's global

equities gauge and oil prices fell on Wednesday while safe-haven

assets Treasuries and Japan's yen were in demand as mixed batch

of economic data drove concerns about slowing growth.

Crude oil futures settled lower for the third day in a row,

including a more than 4% loss on Tuesday.

In U.S. Treasuries, yields fell and the closely watched

yield curve between two-year and 10-year notes turned positive

after data showed that U.S. job openings fell to a 3-1/2-year

low in July.

On Tuesday, Wall Street stock indexes registered their

biggest daily percentage drops since early August as investors

took profits while weak U.S. manufacturing data did little to

boost risk appetites.

On Wednesday, the S&P 500 was last down after

spending the morning flitting between red and green as investors

waited anxiously for the rest of the week's data. Thursday will

bring a reading on the U.S. services industry with jobless

claims data.

Friday's hotly anticipated August report for nonfarm

payrolls is expected to provide the clearest clues as to the

health of the U.S. economy and whether the Federal Reserve will

cut interest rates this month by a quarter or a half a

percentage point.

"In a historically weak month for stocks, investors are

acting more cautious and more concerned about the growth outlook

than the inflation outlook," said Anthony Saglimbene, chief

market strategist at Ameriprise Financial in Troy, Michigan.

Wednesday's data was a mixed bag. A Commerce Department

report showed new orders for U.S.-manufactured goods increased

more than expected in July, boosted by defense aircraft. But

demand elsewhere was moderate with borrowing costs high.

U.S. job openings in July dropped to their lowest level

since January 2021, suggesting the labor market was losing steam

and leading traders to add to bets that the Fed will deliver a

half-a-percentage-point cut in rates at its meeting this month.

"The setup is changing. Maybe three-four months ago, markets

would feel good about a 50 basis point cut. Now a 50 basis point

cut would signal that growth is slowing more than expected and

that the Fed is behind the curve," said Ameriprise's Saglimbene.

Also on Wednesday, Atlanta Federal Reserve President Raphael

Bostic said the U.S. central bank must not keep interest rates

too high much longer or it risks harming employment too much.

On Wall Street at 2:54 p.m. (1854 GMT) the Dow Jones

Industrial Average fell 47.42 points, or 0.12%, to

40,889.51; the S&P 500 lost 16.20 points, or 0.29%, to

5,512.73; and the Nasdaq Composite lost 61.41 points, or

0.36%, to 17,074.89.

MSCI's gauge of stocks across the globe fell

5.44 points, or 0.66%, to 814.03. Earlier in the day, Europe's

STOXX 600 index closed down 0.97%.

In foreign exchange markets, the dollar eased against most

major currencies after the July U.S. job openings data tilted

the odds further in favor of larger U.S. rate cuts while the yen

benefited from a safe haven bid.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

fell 0.32% to 101.37.

The euro was up 0.28% at $1.1074 while against the

Japanese yen, the dollar weakened 1.05% to 143.94.

"Stock market instability and dropping U.S. yields have made

the yen a strong performer," said Marc Chandler, chief market

strategist at Bannockburn Global Forex.

In Treasuries, the yield on benchmark U.S. 10-year notes

fell 7.6 basis points to 3.768%, from 3.844% late on

Tuesday. The 2-year note yield, which typically moves

in step with interest rate expectations, fell 11.4 basis points

to 3.7745%, from 3.888% late on Tuesday.

A closely watched part of the U.S. Treasury yield curve

measuring the gap between yields on two- and 10-year Treasury

notes, seen as an indicator of economic

expectations, was last at a negative 0.9 basis points.

"The big event of the week comes in the form of Friday's

payrolls print," said Ian Lyngen, head of U.S. rates strategy at

BMO Capital Markets in New York. "That's to a large extent going

to give us the road map for what to expect from the Fed. The

employment data is now overshadowing inflation as the biggest

risk to near-term policy expectations."

Crude oil prices fell on pessimism about demand in the

coming months as crude producers offered mixed signals about

supply increases. Lackluster data from the U.S. and China have

added to persistent expectations for a weaker global economy.

U.S. crude settled down 1.6% at $69.20 a barrel while

Brent settled at $72.70 per barrel, down 1.4%.

Gold prices reversed course to gain ground with help from a

softer dollar and lower yields after the weak data on U.S. job

openings. Spot gold added 0.05% to $2,494.07 an ounce.