GLOBAL MARKETS-Wall Street, Europe dip after China shares tumble

(Updates with U.S (Other OTC: UBGXF - news) . markets close, oil settlement prices)

* Chinese stocks slide 6 percent

* WTI crude bounces from near six-year lows

* Copper touches six-year lows

* Wal-Mart earnings weigh on U.S. stocks

By Chuck Mikolajczak

NEW YORK, Aug 18 (Reuters) - A 6 percent tumble in Chinese shares on Tuesday and soft earnings from Wal-Mart held U.S. equities in check while copper touched multi-year lows.

Wal-Mart Stores Inc fell 3.4 percent to $69.48, the biggest drag on both the Dow and S&P 500, after reporting weaker-than-expected quarterly earnings and lowering its full-year forecast.

A broad measure of Asian stocks fell to a two-year low, and Wall Street traded lower as the Chinese yuan weakened against the dollar, sparking renewed fears that Beijing may be intent on a deeper devaluation of the currency.

"You would think that a 6 percent China move amid the recent currency adjustments would have netted a more negative result," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

"When we approach downside sell-offs the market is bending but not breaking and when we get towards the upper end of the range there is not enough to push it through, so it's been a rubber band kind of mentality."

The Dow Jones industrial average fell 33.84 points, or 0.19 percent, to 17,511.34, the S&P 500 dropped 5.52 points, or 0.26 percent, to 2,096.92 and the Nasdaq Composite declined 32.35 points, or 0.64 percent, to 5,059.35.

Earlier, China's main Shanghai Composite and Shenzhen 300 indexes lost fell more than 6 percent as investors bet demand in China will cool further.

MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan was down 1.2 percent after hitting its lowest since July 2013. Japan's Nikkei dipped 0.3 percent.

MSCI's all-country world stock index eased 0.31 percent.

Britain's FTSE 100 closed down 0.4 percent. The pan-European FTSEurofirst index of 300 leading shares managed a gain of 0.2 percent, after earlier declines. Germany's DAX dropped 0.2 percent and France's CAC 40 fell 0.3 percent.

The worries about China came on a day when trade in the yuan was relatively calm after Beijing fixed the currency's exchange rate marginally higher for the third successive session.

China's central bank on Tuesday set the yuan's midpoint near Monday's closing price at 6.3966 per U.S. dollar. In the spot market, the yuan closed flat at 6.3938 .

Concerns about slowing growth in China also hit copper prices, which slid to a six-year low of $4,983 a tonne, to pierce the psychological $5,000 level, and were last down 1.8 percent at $5,022 a tonne.

But oil prices rebounded from initial declines after bullish U.S. housing data and on bets on an inventory decline. Brent oil futures settled up 7 cents at $48.81 per barrel to steady after a three-day fall while U.S. crude rebounded from nearly a 6-1/2-year low to settle up 1.8 percent at $42.62.

Investors will look to U.S. inflation data and minutes of the latest Federal Reserve monetary policy meeting on Wednesday, as they seek for clues as to when the Fed will begin raising interest rates.

Most investors are expecting a rate increase to occur by the end of the year. Benchmark 10-year Treasury notes were down 13/32 in price to yield 2.1961 percent. (Reporting by Chuck Mikolajczak; Editing by James Dalgleish and Steve Orlofsky)