(Updates prices in late morning trading)

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Stocks fall as investors look for safer assets

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Chinese Feb consumer prices fall at fastest pace in 13

months

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US Treasury yields drop, crude oil falls

By Sinéad Carew and Nell Mackenzie

NEW YORK/LONDON, March 10 (Reuters) - MSCI's global

equities gauge was down 1.7% after earlier touching a near

two-month low on Monday while U.S. bond yields dropped as

investors worried about an economic slowdown after U.S.

President Donald Trump did not rule out a tariff-related

recession.

Investors started seeking safety as early as Sunday when

Trump in a Fox News interview talked about a "period of

transition" while declining to predict whether his tariffs on

China, Canada and Mexico would result in a U.S. recession.

Robert Pavlik, senior portfolio manager at Dakota Wealth in

Fairfield, Connecticut, cited concerns around tariffs including

Trump's interview as key factors behind Monday's risk-off mood.

"When he says there's going to be pain felt he's telling you

this may not be short term in nature. This may not be a

negotiation tactic," said Pavlik.

"Tariffs create a bunch of uncertainties around costs,

inflation and economic growth. You don't know the end game and

you don't know the goal," he said. "How do you plan for that?

How do you buy a stock for the future when you don't know what

the future holds?"

At 11:18 a.m. the S&P 500 was down 114.82 points, or

1.99%, to 5,655.38 and the Nasdaq Composite was 641.86

points, or 3.48%, lower at 17,562.91, with both hitting their

lowest levels since September.

The Dow Jones Industrial Average fell 370.16 points,

or 0.86%, to 42,431.56,

MSCI's gauge of stocks across the globe fell

14.79 points, or 1.74%, to 837.31, hitting its lowest level

since mid January.

The pan-European STOXX 600 index fell 0.99%,

hitting its lowest level in a month.

Yields fell with U.S. government bonds in demand after the

Trump interview cut into investor confidence.

"If the occupant in the White House is himself not terribly

optimistic about short-term growth expectations, why should the

market be optimistic about it?" said Will Compernolle, macro

strategist at FHN Financial.

Heading for its biggest one-day drop in almost a month, the

yield on benchmark U.S. 10-year notes fell 9.9 basis

points to 4.219%, from 4.318% late on Friday.

The 30-year bond yield fell 8.7 basis points to

4.5299% while the 2-year note yield, which typically

moves in step with interest rate expectations for the Federal

Reserve, fell 7.9 basis points to 3.923%.

In currencies, investors looked to Japan's yen for safety

with the U.S. dollar weakening 0.68% to 147.03 yen. The

euro was down 0.04% at $1.0828 while sterling

weakened 0.09% to $1.2909.

Oil prices sank on concern over the impact of U.S. tariffs

and rising output from OPEC+ producers, although potential

sanctions on Iranian oil exports kept prices from falling

farther.

U.S. crude fell 0.75% to $66.54 a barrel and Brent

fell to $69.81 per barrel, down 0.78%.

Gold prices dipped as profit-taking countered support from

safe-haven demand, with focus also on the U.S. inflation print

later this week.

Spot gold fell 0.31% to $2,901.73 an ounce. U.S. gold

futures edged up 0.1% to $2,907.50 an ounce. Copper

declined 0.76% to $9,540.00 a metric ton.

In cryptocurrencies, bitcoin fell 3.54% to

$80,140.80.

The long-awaited U.S. executive order on creating a

strategic reserve of cryptocurrencies came on Friday, but

disappointed many investors by saying there would be no

additional buying of bitcoin.

Earlier, data showed deflationary pressure in China as its

February consumer price index missed expectations and fell at

the sharpest pace in 13 months, while producer price deflation

persisted, as seasonal demand faded and households remained

cautious about spending amid job and income worries.

China's blue-chip CSI300 Index closed 0.4% lower,

while Hong Kong's benchmark Hang Seng fell 1.9%.