GLOBAL MARKETS-Equities selloff steepens, dollar slips as growth woes eyed

* Wall St indices drop 2 percent

* Treasuries yields touch recent record lows

* Brent oil at two-year lows under $90 a barrel

* Gold up for fourth day

(Adds closing New York prices, quotes)

By Michael Connor

NEW YORK, Oct 9 (Reuters) - Wall Street stocks slumped 2

percent on Thursday as anxieties about global economic growth

smothered a short-lived rally in equity markets around the world

that was sparked by speculation the Federal Reserve would not

rush interest rate rises.

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.

"You just look at the global picture, the concerns in Europe,

Japan and emerging markets. They're all slowing, and people are

leery of equity markets," said Ken Wills, senior corporate

dealer at U.S. Forex in Toronto. "So, there's an awful lot of

flows piling into the U.S. Treasury market."

Oil prices, deeply affected by the dollar's value, tumbled to

a two-year low.

Energy stocks were big losers on Wall Street, where leading

indices were off sharply. The MSCI index of world stocks

was off one percent at 406.89.

The Dow Jones industrial average fell 333.62 points,

or 1.96 percent, to 16,660.6, the S&P 500 lost 40.53

points, or 2.06 percent, to 1,928.36 and the Nasdaq Composite

dropped 90.26 points, or 2.02 percent, to 4,378.34.

The S&P Energy Index was down 3.6 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 be in a hurry to raise interest rates.

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 for the first time since

mid-2012. 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 $1.70 at

$89.68. U.S. November crude lost $1.67 to $85.63.

"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 profits and pared back bullish bets on the

greenback. The dollar was last off 0.30 percent to 107.78 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 (NasdaqGS: IBKR - news)

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 got a lift from Wall Street's woes and rose

for a fourth straight day to its highest since Sept. 23 at

$1,233.20 an ounce early on Thursday. It was last trading up 0.3

percent at $1,224.10.

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 7/32 to yield 3.073 percent.

(Editing by Chizu Nomiyama)