GLOBAL MARKETS-Stocks slip on U.S.-China tensions; oil rises to 2-1/2-month high

(Adds U.S. market open, byline, dateline; previous LONDON)
* Oil prices extend gains to 2-1/2 month high
* Dollar trying to snap four-day losing streak
* Bond markets digest glut of supply
* U.S. jobless claims 2.4 million, in line with estimates

By Herbert Lash and Marc Jones
NEW YORK/LONDON, May 21 (Reuters) - Global equities trended
lower on Thursday on concerns about the long-term economic
impact of the new coronavirus and simmering U.S.-China tensions,
though oil markets set aside those worries and marched to a
2-1/2 month high.
The London .FTSE , Paris .FCHI and Frankfurt .GDAX
bourses fell as did the S&P 500 and Nasdaq on Wall Street, but
the Dow industrials edged higher in choppy trade.
The dollar traded in a narrow range as investors weighed the
impact of global business lockdowns and the euro's four-day
rally against the U.S. currency ran out of steam.
Gold slipped 1%, as a strong dollar pushed it off this
week's 7-1/2 year peak.
Rising tensions between Washington and Beijing over China's
handling of the coronavirus outbreak gave investors pause. U.S.
Secretary of State Mike Pompeo on Wednesdau called China's $2
billion pledge to fight the pandemic "paltry." "The biggest threat to the U.S. market this year is actually
the potential for ignition of the tariff war, between the U.S.
and China," said Kristina Hooper, chief global market strategist
at Invesco in New York.
Stocks in the short run are driven by news flow, though bias
is to the upside because of easy monetary policy from the
Federal Reserve, Hooper said.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
1.04%, while the pan-European STOXX 600 index .STOXX lost
0.57%.
On Wall Street, the Dow Jones Industrial Average .DJI fell
198.19 points, or 0.81%, to 24,377.71. The S&P 500 .SPX lost
32.61 points, or 1.10%, to 2,939 and the Nasdaq Composite
.IXIC dropped 120.43 points, or 1.28%, to 9,255.35.
In Europe, purchasing manager index surveys (PMIs) confirmed
economic activity has begun to return, though they were far from
stellar.
Euro zone-wide figures came in better than expected overall
but Germany's improvement undershot forecasts. It
was the third month in a row that the surveys were plonked
firmly in economic contraction territory. Oil rose on the view that slumping fuel demand should
rebound. Brent, the international benchmark, has bounced up $20
a barrel over the past month.
U.S. crude CLc1 rose 1.05% to $33.84 per barrel and Brent
LCOc1 was at $36.19, up 1.23% on the day.
The market absorbed the latest glut of government debt to
pay for coronavirus support programs fairly smoothly. The United
States auctioned $20 billion of 20-year debt for the first time
since 1986 on Wednesday.
Italy sold roughly the same and Spain said it
will need to raise almost 100 billion euros more than planned

The benchmark U.S. 10-year notes US10YT=RR fell 1.8 basis
points to yield 0.6541%.
U.S. weekly jobless claims came in at a seasonally adjusted
2.4 million, in line with a Reuters survey of economists ahead
of the data and well off the record 6.867 million at the end of
March.
The dollar index =USD rose 0.278%, with the euro EUR=
down 0.27% to $1.0947. The Japanese yen weakened 0.14% versus
the greenback at 107.69 per dollar.

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