* Wall St falls on dismal U.S. jobs data for June
* Yields on benchmark Treasuries approach 3 percent
* World stocks slip from five-week highs
* US crude down more than 2 pct, erasing Thursday gains
(Updates with closing prices)
By Barani Krishnan
NEW YORK, July 8 (Reuters) - Stock markets around the world fell on Friday and oil prices slumped as a dismal report on America's labor market disappointed investors expecting a stronger recovery in the world's largest economy.
Gold capped its best week of the year and investors rushed into U.S. Treasury debt, turning safe-haven investments into the day's top performers.
The U.S. Labor Department said the country's non-farm payrolls -- a key indicator for global markets -- grew by only 18,000 in June, the weakest reading since September, and well below economists' expectations of a gain of 90,000. For details, see [ID:nN1E7670C0]
"It's a terrible number. There is no good news you can glean from it," said David Semmens, U.S. economist at Standard Chartered in New York.
U.S. stocks' benchmark S&P 500 index fell almost 1.0 percent, erasing much of the gains over the last two sessions.
Anxiety about another recession spurred a stampede into short-term interest-rate futures. Investors now expect the Federal Reserve will keep interest rates near zero into late 2012 to support the fragile economy.
The spot price of gold shot up almost 1.0 percent for the day. Longer-dated Treasuries surged a full point or more, while the yield on the benchmark 10-year note hovered at around 3.0 percent.
In commodity markets, U.S. crude oil futures prices
On Wall Street, the Dow Jones industrial average <.DJI> was down 62.29 points, or 0.49 percent, at 12,657.20. The Standard & Poor's 500 Index <.SPX> was down 9.42 points, or 0.70 percent, at 1,343.80. The Nasdaq Composite Index <.IXIC> was down 12.85 points, or 0.45 percent, at 2,859.81.
Global stock prices retreated from five-week highs to head lower. European stocks slid as the negative sentiment emanating from the U.S. jobs report added to worries about the euro-zone banking sector in Greece, Portugal and Ireland in particular.
The MSCI world equity index <.MIWD00000PUS> shed 0.8 percent to 344.64. The FTSEurofirst 300 index <.FTEU3> also slid 0.8 percent to close at 1,114.44. An index of emerging market stocks <.MSCIEF> hit a two-month high before slipping 0.4 percent to 1,163.50.
The U.S. dollar fell as low as 80.48 yen
The price of the 30-year U.S. Treasury bond
The benchmark 10-year U.S. Treasury note
In European debt markets, German Bunds rallied and the bonds of some poorer nations came under pressure as concerns over slow progress on a second Greek fiscal bailout and the health of European banks underpinned demand for safe-haven assets.
Oil prices slid in volatile trade after the U.S. payrolls data dashed hopes of investors who had positioned themselves for a much stronger number.
U.S. crude oil
(Additional reporting by Emelia Sithole in London)