* Global stocks hit two-year lows
* Glencore shares bounce in London after plunge in Hong Kong
* Early rally in U.S. biotechs fade, down eight straight sessions
* Platinum falls to lowest level since December 2008 (Updates with close of U.S. markets, oil settlement prices)
By Chuck Mikolajczak
NEW YORK, Sept 29 (Reuters) - Global equity markets reached a two-year low on Tuesday as the outlook for raw materials prices and emerging markets remained soft, while U.S. biotech shares remained under pressure.
Commodity prices edged up but held near multi-year lows on concern over an economic slowdown in major raw material consumer China. U.S. stocks closed slightly higher in a choppy session, and an early rally in biotechs faded to deal the sector its eighth straight drop.
The S&P 500 managed to barely snap a five-session losing streak, but remained close to August lows that analysts see as a key support level.
"I don't like the way this market looks at all right now. The S&P is getting ready to test the August low," said Randy Frederick, managing director of trading and derivatives for Charles Schwab (NYSE:SCHW) in Austin.
"A retest is a good thing, but it needs to hold."
Since the Federal Reserve held U.S. interest rates in check on Sept. 17, markets have been kept off balance on the timing of a rate hike.
Fed officials gave mixed messages on Monday and investors were looking to a speech from Fed Chair Janet Yellen on Wednesday for more clarity, with a key U.S. payrolls report also due on Friday. ID:nL1N11Y2L9
Mining and trading company Glencore GLEN.L , whose shares fell by almost a third on Monday on investor concern over its debt levels, bounced up 16.9 percent in London but only after its Hong Kong-listed shares 0805.HK fell 29 percent.
Copper CMCU3 steadied after hitting a one-month low. It last traded at $4,970.15 a tonne, up 0.1 percent on the day but within reach of a 6-1/2-year low below $4,855. ID:nL5N11Z20V
Platinum XPT= fell to a low of $894 an ounce, its lowest since December 2008, on fears that the emissions scandal surrounding German carmaker Volkswagen (XETRA:VOWG) could hit demand from the auto sector. It last stood at $910.75, down 0.6 percent. ID:nL5N11Z4D0
The pan-European FTSEurofirst 300 index .FTEU3 closed down 0.6 percent, recovering from a steeper fall led by biotech shares .SXDP .
U.S. biotechs .NBI were volatile, rising as much as 3.9 percent before gains dissipated to send the sector down 0.6 percent. The Nasdaq Biotech Index is down 20 percent over its last eight sessions on concerns over government intervention in drug pricing.
MSCI's all-country share index .MIWD00000PUS was down 0.6 percent after touching a two-year low.
The flash reading of annual euro zone inflation is due on Wednesday. A fall into negative inflation would fuel speculation about further European Central Bank stimulus, six months after the euro zone's central bank launched a massive asset purchase program.
The U.S. 10-year Treasury note US10YT=RR rose 11/32 in price to yield 2.0561 percent. ID:nL1N11Z10W
The Dow Jones industrial average .DJI rose 47.24 points, or 0.3 percent, to 16,049.13, the S&P 500 .SPX gained 2.31 points, or 0.12 percent, to 1,884.08 and the Nasdaq Composite .IXIC dropped 26.65 points, or 0.59 percent, to 4,517.32.
Brent crude oil LCOc1 , which lost 2.6 percent on Monday, rebounded to settle up 89 cents a barrel to $48.23 while U.S. crude gained 1.8 percent to settle at $45.23 on expectations U.S. crude inventories dropped in the latest week. ID:nL3N11Z1D6