* U.S. stocks slip after weak Morgan Stanley (N:MS) results
* Morgan Stanley profit falls 42 percent in Q3
* Brent crude drops 3 pct, U.S. crude off 2 pct
* Dollar gains ahead of ECB meeting
* China growth data weak but slights beats forecast (Adds U.S. markets open, byline, dateline; previous LONDON)
By Sam Forgione
NEW YORK, Oct 19 (Reuters) - U.S. markets slipped on Monday after weak results from Morgan Stanley stoked worries over the health of the world's biggest banks, while oil prices tumbled on concerns over tepid demand from China.
European equity markets gave up most of their earlier gains following the release of Morgan Stanley's results and amid weakness in commodity stocks, while most Asian markets were weighed down by poor Chinese growth data. .EU
Morgan Stanley's profit plunged 42 percent MS.N , capping a generally downbeat quarter for big U.S. banks in recent months, after investors fled the bond, currency and commodity markets. Morgan Stanley's shares MS.N fell 6.2 percent, and the stock was the second-largest drag on the benchmark S&P 500 index. urn:newsml:reuters.com:*:nL3N12J4K0 urn:newsml:reuters.com:*:nL3N12J4ID
The results stoked worries over the state of other big world banks. Among major U.S. banks, only Wells Fargo (N:WFC) & Co WFC.N has reported a rise in revenue and income from interests on loans in the third quarter, while Germany's Deutsche Bank DBKGn.DE reported a record third-quarter loss earlier this month.
"After three weeks of market gains, any disappointing earnings this morning could indicate that we could be in for some profit-taking," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
China's economy, the world's second biggest, grew at the slowest pace in six years in the third quarter, data showed on Monday, making it increasingly likely that Beijing will cut interest rates to spur activity. urn:newsml:reuters.com:*:nL3N12J1EK
While monthly Chinese industrial output numbers were poor and the quarterly growth figure was the weakest since the 2008 financial crisis, the 6.9 percent reading just beat a forecast for 6.8 percent and suggested official efforts to stimulate the economy were working.
OIL DROPS
The reaction in the oil market was negative, with Brent crude down 3 percent and U.S. crude off 2 percent, on concerns over slowing growth in China, the world's largest energy consumer.
Data also showed that Chinese oil demand fell slightly in September, meaning the country's year-to-date growth is running behind the International Energy Agency's forecast. urn:newsml:reuters.com:*:nL3N12J1H2
The MSCI world equity index .MIWD00000PUS , which tracks 46 key global markets, was last down 0.23 percent, while the pan-regional FTSEurofirst 300 index .FTEU3 was last up 0.25 percent.
The Dow Jones industrial average .DJI was last down 22.85 points, or 0.13 percent, at 17,193.12. The S&P 500 .SPX was down 1.92 points, or 0.09 percent, at 2,031.19. The Nasdaq Composite .IXIC was up 16.68 points, or 0.34 percent, at 4,903.37.
Brent crude LCOc1 was last down $1.33 at $49.13 a barrel, while U.S. crude CLc1 was last down 81 cents at $46.45 per barrel.
The euro retreated to a 10-day low against the dollar of $1.1308 as investors focused on a European Central Bank meeting later in the week that could pave the way for further stimulus to boost inflation in the euro zone. urn:newsml:reuters.com:*:nL1N12J0UB
"Any dovish shift in the ECB's language will be seen as increasing the odds of more stimulus and likely send the euro broadly lower," said Omer Esiner, chief market analyst, at Commonwealth Foreign Exchange in Washington.
The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.41 percent at 94.932 .DXY .
U.S. 30-year Treasury yields US30YT=RR rose to a nearly one-week high of 2.91 percent, while spot gold prices XAU= were last down 0.53 percent at $1,170.70 an ounce. urn:newsml:reuters.com:*:nL3N12J355