GLOBAL MARKETS-Stocks, copper fall; China, Europe growth concerns weigh

* S&P 500 down about 1 pct

* Copper hits lowest since July 2009

* Report shows unexpected fall in U.S. new home sales (Updates to late U.S. afternoon trading, adds U.S. oil settlement)

By Caroline Valetkevitch

NEW YORK, July 24 (Reuters) - Global (Shenzhen: 300465.SZ - news) equity markets dropped and copper fell to a six-year low on Friday as weaker-than-expected data from China and the euro zone exacerbated concerns over global economic growth.

Oil prices also fell, extending recent declines.

Energy and materials shares weighed on the S&P 500, which dropped about 1 percent and was at its lowest level in two weeks. Biotech shares also were a drag following a disappointing forecast from Biogen (NasdaqGS: BIIB - news) . The S&P 500 was on track for its worst weekly decline since March.

Copper slumped to its lowest level in six years, with three-month copper on the LME hitting $5,191.50 a tonne, its cheapest since July 2009, before paring losses.

A survey showed Chinese manufacturing contracted by the most in 15 months in July as orders shrank. Worries over demand increased in the world's biggest metals consumer as stockpiles mounted.

The flash Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) showed activity contracted for a fifth straight month, and faster than economists polled by Reuters had estimated.

Euro zone business activity also started the second half of the year on less secure footing than expected, hit by Greece's near-bankruptcy. Markit (NasdaqGS: MRKT - news) 's flash euro zone PMI fell to 53.7 in July from June's four-year high of 54.2. A Reuters poll had predicted a more modest dip to 54.0.

MSCI (NYSE: MSCI - news) 's all-country equities world index was down 1 percent, while European shares closed down 0.9 percent.

The Dow Jones industrial average fell 163.92 points, or 0.92 percent, to 17,568, the S&P 500 lost 23.42 points, or 1.11 percent, to 2,078.73 and the Nasdaq Composite dropped 57.87 points, or 1.12 percent, to 5,088.54.

Adding to the bearish tone for Wall Street, Democratic presidential candidate Hillary Clinton is expected to propose nearly doubling the U.S. capital gains tax rate on short-term investments, according to a Wall Street Journal report.

Amazon.com (NasdaqGS: AMZN - news) shares jumped as much as 20.4 percent to a record high of $580.57, a day after the online retailer posted an unexpected quarterly profit.

Among other gainers, British telecom firm Vodafone rose after results showed improvements across major markets in Germany and Britain.

In the energy market, U.S. crude for September delivery fell 31 cents to settle at $48.14. A rise in the number of U.S. oil drilling rigs added pressure.

"Crude was already lower on concerns about the global economy and the rig count added to the negativity," said Phil Flynn, analyst at Price Futures Group in Chicago.

U.S. Treasury debt prices drifted higher as investors sought safety in government bonds after a softer-than-expected U.S. housing report. U.S. 30-year bonds were up 6/32 in price to yield 2.972 percent.

U.S. DOLLAR EDGES UP, AUSSIE DOWN

The U.S. dollar edged up against most other major currencies on the data that pointed to sluggish overseas economic growth, while the Australian dollar sagged to a six-year low.

In late U.S. trading, the dollar index was up 0.2 percent at 97.274, trimming its weekly decline to 0.6 percent.

The Aussie dollar, often used as a liquid proxy for China trades, fell more than 1 percent to $0.7280, a six-year low. The recent decline in a wide range of commodities, including oil, has weighed on currencies like the Canadian and Australian dollars.

Gold turned higher after sliding more than 1 percent to its lowest since early 2010. Spot gold hit its lowest since February 2010 at $1,077.00 an ounce but was last up 0.5 percent at $1,096.29. (Additional reporting by Marius Zaharia and Robert Gibbons in New York; Saikat Chatterjee in Hong Kong, Patrick Graham and John Geddie in London; Editing by Bernadette Baum and Meredith Mazzilli)