(Adds U.S. market open, byline, dateline; previous LONDON)
* Oil prices extend gains to 2-1/2 month high
* Dollar trying to snap four-day losing streak
* Bond markets digest glut of supply
* U.S. jobless claims 2.4 million, in line with estimates
By Herbert Lash and Marc Jones
NEW YORK/LONDON, May 21 (Reuters) - Global equities trended lower on Thursday on concerns about the long-term economic impact of the new coronavirus and simmering U.S.-China tensions, though oil markets set aside those worries and marched to a 2-1/2 month high.
The London .FTSE , Paris .FCHI and Frankfurt .GDAX bourses fell as did the S&P 500 and Nasdaq on Wall Street, but the Dow industrials edged higher in choppy trade.
The dollar traded in a narrow range as investors weighed the impact of global business lockdowns and the euro's four-day rally against the U.S. currency ran out of steam.
Gold slipped 1%, as a strong dollar pushed it off this week's 7-1/2 year peak.
Rising tensions between Washington and Beijing over China's handling of the coronavirus outbreak gave investors pause. U.S. Secretary of State Mike Pompeo on Wednesdau called China's $2 billion pledge to fight the pandemic "paltry." biggest threat to the U.S. market this year is actually the potential for ignition of the tariff war, between the U.S. and China," said Kristina Hooper, chief global market strategist at Invesco in New York.
Stocks in the short run are driven by news flow, though bias is to the upside because of easy monetary policy from the Federal Reserve, Hooper said.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed 1.04%, while the pan-European STOXX 600 index .STOXX lost 0.57%.
On Wall Street, the Dow Jones Industrial Average .DJI fell 198.19 points, or 0.81%, to 24,377.71. The S&P 500 .SPX lost 32.61 points, or 1.10%, to 2,939 and the Nasdaq Composite .IXIC dropped 120.43 points, or 1.28%, to 9,255.35.
In Europe, purchasing manager index surveys (PMIs) confirmed economic activity has begun to return, though they were far from stellar.
Euro zone-wide figures came in better than expected overall but Germany's improvement undershot forecasts. It was the third month in a row that the surveys were plonked firmly in economic contraction territory. rose on the view that slumping fuel demand should rebound. Brent, the international benchmark, has bounced up $20 a barrel over the past month.
U.S. crude CLc1 rose 1.05% to $33.84 per barrel and Brent LCOc1 was at $36.19, up 1.23% on the day.
The market absorbed the latest glut of government debt to pay for coronavirus support programs fairly smoothly. The United States auctioned $20 billion of 20-year debt for the first time since 1986 on Wednesday.
Italy sold roughly the same and Spain said it will need to raise almost 100 billion euros more than planned benchmark U.S. 10-year notes US10YT=RR fell 1.8 basis points to yield 0.6541%.
U.S. weekly jobless claims came in at a seasonally adjusted 2.4 million, in line with a Reuters survey of economists ahead of the data and well off the record 6.867 million at the end of March.
The dollar index =USD rose 0.278%, with the euro EUR= down 0.27% to $1.0947. The Japanese yen weakened 0.14% versus the greenback at 107.69 per dollar.
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https://graphics.reuters.com/CHINA-HEALTH-MAP/0100B59S39E/index.html FACTBOX-Global economic policy response to the coronavirus crisis