GLOBAL MARKETS-Yields slip, stocks struggle as economic fears grow

(Adds U.S. market open, byline; changes dateline, previous LONDON)

* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Herbert Lash

NEW YORK, May 16 (Reuters) - American and European equity markets wobbled and U.S. Treasury yields fell on Monday after unexpectedly weak economic data from China and a big slide in New York state's factory activity painted a bleak picture for economic growth across the world.

Chinese retail and factory activity fell sharply in April as COVID-19 lockdowns severely disrupted supply chains while New York factory output slumped in May for the third time this year amid a collapse in new orders and shipments.

The Chinese data cast a long shadow over the outlook for the world's second-largest economy while the steep drop in New York factory output could be an early signal of the impact on manufacturing of the Federal Reserve's aggressive monetary policy posture.

MSCI's gauge of stocks across the globe shed 0.37% and Treasury yields fell, with the benchmark 10-year Treasury note down 7.1 basis points at 2.862%.

China continues to be an issue, as does Europe, especially eastern Europe and Putin's threats toward Finland and Sweden's plans to join NATO, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.

"When you see big up days, I'm not surprised to see some profit-taking on the subsequent day," Ghriskey said, referring to Friday's rally on Wall Street. "We're simply seeing a reaction to recent strength. There are various factors driving the market, but in general, none of them are very positive."

The pan-European STOXX 600 index fell 0.16% and emerging market stocks rose 0.22%.

On Wall Street, the Dow Jones Industrial Average fell 0.4%, the S&P 500 lost 0.64% and the Nasdaq Composite dropped 1.22%.

The dollar was down slightly after hitting a 20-year peak last week.

The dollar index fell 0.048%, with the euro down 0.09% to $1.0403 and the Japanese yen up 0.09% at 129.09 per dollar.

The dollar is likely to strengthen because of the macro economic outlook, whose fundamentals don't look good, said Bipan Rai, North America head of FX Strategy at CIBC Capital Markets.

"From a risk-off perspective, that should still support the dollar against most currencies," Rai said.

But the dollar is consolidating after recent strength and could see more range-bound trading sessions, he said.

The euro was near its lowest since 2017. European Central Bank policymaker Francois Villeroy de Galhau said the euro's weakness could threaten the central bank's efforts to steer inflation toward its target.

Gold slightly rose as a retreat in U.S. Treasury yields offset headwinds from a relatively firm dollar.

Spot gold added 0.1% to $1,813.01 an ounce.

Oil prices rose as the European Union stepped closer to an import ban on Russian crude, while the uptrend was offset by the widespread lockdowns and week economic data in China fueled concerns of a global slowdown.

U.S. crude futures recently rose 0.72% to $111.29 per barrel and Brent was at $111.77, up 0.2% on the day.

Bitcoin last fell 5.23% to $29,656.97.

European government bond yields rose, with Germany's 10-year yield down 0.9 basis points at 0.943% - below the roughly eight-year high of 1.19% it reached last Monday.

The ECB will likely decide at its next meeting to end its stimulus program in July and raise interest rates "very soon" after that, ECB policymaker Pablo Hernandez de Cos said on Saturday.

(Reporting by Herbert Lash; additional reporting by Elizabeth Howcroft in London; editing by Ed Osmond, Chizu Nomiyama and Jonathan Oatis)