(This March 13 story has been refiled to fix the day to Thursday, not Tuesday, in paragraph 1)

By Sinéad Carew and Harry Robertson

NEW YORK/LONDON (Reuters) - Global equities sank on Thursday with the S&P 500 confirming it was in a correction while U.S. Treasury prices rose as investors fled for safer assets as they worried that global trade tensions would boost inflation and slow growth after U.S. President Donald Trump's latest tariff threats.

On Thursday, for the first time, the benchmark S&P 500 finished more than 10% below its most recent record high close, achieved on February 19.

In the latest in a long list of tariff threats, Trump said he would hit European beverage imports with duties of 200% if the EU does not remove U.S. whiskey surcharges. This was after his increased tariffs on all U.S. steel and aluminium imports took effect on Wednesday.

Thursday's Labor Department's Bureau of Labor Statistics data showed U.S. producer prices (PPI) were unexpectedly unchanged in February and Wednesday's data showed consumer prices (CPI) rising more slowly than expected.

But last month's trends did little to reassure investors who were bracing for the impact of trade wars on future inflation and growth.

"If it wasn't for the trade war going on, the market would be up strongly" on the inflation data, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "Traders are focused on the trade war."

"It seems like the (U.S.) administration is being very aggressive and promises at least at this point to be in it for the longer term and the personalities look unlikely to back down at least in the near term," said Ghriskey.

On Wall Street, the S&P 500 fell 77.78 points, or 1.39%, to 5,521.52.

The Dow Jones Industrial Average was also nearing a correction confirmation, ending down 537.36 points, or 1.30%, at 40,813.57 on Thursday, roughly 9.4% below its most recent record closing high.

The Nasdaq Composite fell 345.44 points, or 1.96%, to 17,303.01. The tech-heavy index was down more than 14% from its recent record after confirming a correction on March 6.

Stock market corrections are fairly common, with the S&P 500 logging a correction 56 times since 1929, according to a Reuters analysis of data from Yardeni Research. Of these, only 22 morphed into bear markets, defined as a fall of 20% or more from most recent record highs, the data showed.

MSCI's gauge of stocks across the globe fell 9.33 points, or 1.12%, to 821.52 on Thursday, putting it more than 7% below its most recent record high after earlier hitting his lowest level since September.

The pan-European STOXX 600 index earlier closed down 0.15% after rising 0.81% in the previous day's session.

While the U.S. S&P 500 index is now down more than 6% for the year-to-date, European stocks have been faring better with support from government spending plans for defence and a potential Ukraine peace deal. Year-to-date the STOXX index is up 6.5% year to date, despite slipping in recent weeks.

U.S. Treasury yields fell on Thursday as the equities selloff boosted demand for safe haven U.S. government debt with escalating trade wars between the United States and trading partners threatening to dent growth and boost inflation.

The yield on benchmark U.S. 10-year notes fell 4.6 basis points to 4.27%, from 4.316% late on Wednesday while the 30-year bond yield fell 4.1 basis points to 4.59%.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 4 basis points to 3.955%, from 3.995% late on Wednesday.

In currencies, the U.S. dollar was a mixed bag, weakening against Japan's safe haven yen but gaining on the euro and the Canadian dollar.

Against the Japanese yen, the dollar weakened 0.38% to 147.68.

But the euro was down 0.33% at $1.085 while the Canadian dollar weakened 0.45% versus the greenback and against the Swiss franc, the dollar strengthened 0.14%.

After rallying on Wednesday on a larger-than-expected draw in U.S. gasoline stocks, oil prices tumbled as traders weighed macroeconomic concerns and demand versus supply expectations.

U.S. crude settled down 1.67%, or $1.13 at $66.55 a barrel and Brent settled at $69.88 per barrel, down 1.51% or $1.07 on the day.

Gold prices raced to a record high within touching distance of the key milestone of $3,000 per ounce on Thursday, with momentum driven by elevated tariff uncertainty and bets on monetary policy easing by the U.S. Federal Reserve.

Spot gold rose 1.73% to $2,982.84 an ounce. U.S. gold futures rose 1.51% to $2,983.50 an ounce.