* Global stocks fall as weak US data spurs recovery fears
* Oil slips more than 3 pct to $77 a barrel demand worries
* U.S. dollar gains as stocks slide after Thursday's rally
* Government debt jump as mixed data fuels recovery doubts (Updates with close of U.S. markets)
By Herbert Lash and Al Yoon
NEW YORK, Oct 30 (Reuters) - Crude prices fell and U.S.
stocks slid hard on Friday after reports cast doubt on the
economy's recovery and questions about Citigroup Inc
Havens like U.S. Treasuries and the U.S. dollar shot higher while assets seen as riskier, such as stocks and oil, plunged.
A key gauge of Wall Street angst -- the CBOE Volatility Index <.VIX> -- jumped almost 24 percent in its biggest single-day spike since October 2008.
The slide in risk appetite pushed the Japanese yen sharply higher and pulled down higher-yielding currencies linked to commodities, including the Australian and New Zealand dollars.
The sell-off on Wall Street erased Thursday's rally, the best one-day gain by U.S. equities in three months, after a better-than-expected report on U.S. gross domestic product.
The 2.5 percent drop in the Dow was its worst one-day percentage loss since July, while the Nasdaq racked up its worst weekly percentage decline -- 5.1 percent -- since March.
For the month, the Dow was unchanged, the S&P 500 fell 2 percent and the Nasdaq slipped 3.6 percent. Both the S&P 500 and Nasdaq snapped seven straight months of gains.
Citigroup shares tumbled 5.1 percent after accounting expert Robert Willens said the bank was likely to have a $10 billion fourth-quarter charge on its deferred tax assets. [ID:nN30427238]
The KBW banks index <.BKX> fell 4.95 percent.
"Confidence still strikes me as shockingly low," said Jeff Kleintop, chief market strategist at LPL Financial in Boston. "Consumers are still very pessimistic, and that is evident in individual investors' hesitancy to embrace this rally."
U.S. consumers cut spending last month while sentiment turned gloomier in October, data showed. Another report showed factory activity in the U.S. Midwest expanded for the first time in more than a year, but employment conditions worsened. [ID:nN30482062]
The Dow Jones industrial average <.DJI> fell 249.85 points, or 2.51 percent, to end at 9,712.73. The Standard & Poor's 500 Index <.SPX> slid 29.92 points, or 2.81 percent, to 1,036.19. The Nasdaq Composite Index <.IXIC> lost 52.44 points, or 2.50 percent, to close at 2,045.11.
With the economy still fragile a year after the global credit crisis, the Federal Reserve will likely stick to its easy borrowing policy and near-zero interest rate target after policymakers convene next week, analysts said.
The benchmark 10-year U.S. Treasury note
The dollar climbed versus a basket of major currencies, with the U.S. Dollar Index <.DXY> up 0.59 percent at 76.367.
The euro
U.S. crude for December delivery
New York gold futures ended lower, but losses were limited on flight-to-quality buying.
Gold for December delivery
The pan-European FTSEurofirst 300 <.FTEU3> index of top shares posted its biggest monthly decline in eight months.
The FTSEurofirst 300 declined 2.11 percent at 976.46.
Asian stocks bounced back from their biggest drop in two months. The MSCI index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 2 percent, but later pared gains, up about 0.9 percent. The Nikkei <.N225> in Tokyo climbed 1.5 percent. (Additional reporting by Leah Schnurr and Chuck Mikolajczak; Editing by James Dalgleish and Diane Craft)