* U.S. still in spotlight over Fed's rate policy
* Emerging market stocks hit two-year low
* Brent hits fresh six-month low, bounces back (Updates prices, changes comment)
By Rodrigo Campos
NEW YORK Aug 6 (Reuters) - Weak earnings dragged stocks lower on Thursday and oil fell on continued oversupply concerns, while Treasuries prices rose ahead of U.S. jobs numbers seen as key to determine the timing of a rate hike from the Federal Reserve.
Sterling fell sharply against the U.S. dollar after only one official voted for higher interest rates at a meeting in which the Bank of England said a strong pound and low oil prices would keep inflation subdued. ID:nL5N10H3YA
Wall Street traded lower, weighed by a second day of sharp declines in media companies after Viacom's VIAB.O earnings miss was linked to viewers increasingly shifting to online streaming. ID:nL3N10H44A
Market participants were looking ahead to U.S. jobs data on Friday that could give a strong pointer to when the Fed will raise interest rates for the first time in nearly a decade. The Fed next meets in mid-September and markets are split between a September or December hike.
"In a classic risk-off move, investors are selling equities and buying bonds," Goldman Sachs (NYSE:GS) said in a note to clients.
"It is this uncertainty around Fed timing that may - in part - be responsible for the risk aversion we're seeing today."
At 3:04 p.m. EDT (1904 GMT) the Dow Jones industrial average .DJI fell 123.36 points, or 0.7 percent, to 17,417.11, the S&P 500 .SPX lost 16.57 points, or 0.79 percent, to 2,083.27 and the Nasdaq Composite .IXIC dropped 83.29 points, or 1.62 percent, to 5,056.65.
London's FTSE 100 .FTSE equity index fell less than 0.1 percent, outperforming a 0.8 percent drop for the pan-European FTSEurofirst 300 index .FTEU3 on the back of receding BoE rate-hike fears. Weak corporate results hit the shares of Deutsche Post DPWGn.DE and Danish enzyme company Novozymes NZYMb.CO .
A gauge of stocks across the globe .MIWD00000PUS fell 0.5 percent. Emerging market stocks .MSCIEF slipped to their lowest in over two years on nervousness about the timing and scope of a U.S. rate hike and continued weakness in commodity markets.
U.S. Treasuries prices rose on caution ahead of the U.S. jobs report, while reduced inflation fears also supported long-dated Treasuries prices.
U.S. 30-year Treasuries prices US30YT=RR were last up 22/32 in price to yield 2.909 percent compared with a yield of 2.943 percent late Wednesday. Benchmark 10-year notes US10YT=RR were last up 10/32 in price to yield 2.234 percent, compared with a yield of 2.268 percent late Wednesday.
Sterling fell 0.6 percent to $1.5504 GBP= , having traded as high as $1.5636.
The euro EUR= edged up 0.16 percent versus the greenback at $1.0921, but the dollar index .DXY was on track for a second straight week of gains, lifted by a batch of economic data that, overall, has reinforced expectations that the Fed will raise interest rates next month.
The dollar index hit a 12-year high in March above 100 and has traded in a tight range between 96 and 98 for more than a month.
Driving the dollar was the view earlier in the year of the U.S. as engine of global growth alongside an expectation of tighter monetary policy from the Fed according to Michael Arone, chief investment strategist for State Street Global Advisors' U.S. Intermediary Business.
"The U.S. economy is not doing fantastic, and Europe and Japan are growing a bit better than expected," he said. "I don't see [the dollar] climbing significantly higher from here."
Oil prices set multi-month lows after a large drop in U.S. crude inventories failed to boost prices.
Brent LCOc1 fell as much as 1.4 percent to hit a low of $48.88 per barrel, its lowest since late January, before bouncing back to trade little changed. U.S. crude CLc1 set a day low of $44.20, not far from the six-year low of $42.05 hit in March.
"Prices are likely to consolidate or weaken further," said Frankfurt-based Commerzbank (XETRA:CBKG) analyst Carsten Fritsch. "The perception is that oversupply will be there for much longer."
London copper CMCU3 edged up 0.1 percent after gaining as much as 0.8 percent, still near a six-year low hit earlier this week.
Spot gold XAU= struggled to pull away from a 5-1/2-year low as it stood near $1,090 an ounce.