* US stocks fall 1 pct on jobs, non-manufacturing data
* Copper falls to 7-week low on concerns about China
* Euro at 17-month high against dollar, up 0.6 pct
* U.S. crude prices down 1.6 pct on China, stock buildup (Updates with closing prices for U.S. crude oil)
By Walter Brandimarte
NEW YORK, May 4 (Reuters) - Oil and commodity prices fell on Wednesday, driving world stocks lower, as disappointing U.S. economic data and concerns about the slowdown of the Chinese economy prompted investors to scale back risky positions.
The dollar hit a three-year low against major currencies and Wall Street fell as much as 1 percent after a batch of disappointing U.S. economic data for April -- including a surprise slowdown in the services sector and less hiring by the private sector. For details, see [ID:nN04209762].
The euro hit a session high against the dollar at a 17-month high as investors interpreted the data as the latest sign that the Federal Reserve will maintain its current monetary stimulus while euro zone rates go higher.
"This appears to be a bump in the road for the recovery if indeed the pace of job recovery has slowed," said Michael Woolfolk, a strategist at BNY Mellon. "It certainly feeds into the notion that the Fed won't be hiking interest rates soon."
The U.S. Dollar Index <.DXY>, which measures the greenback against a basket of key currencies, fell to a three-year low after the U.S. data. It later recovered slightly to trade 0.25 percent lower.
The euro
CHINESE FEARS
Concerns about the global economic recovery were on the rise as investors anticipated further tightening measures in China, the world's top consumer of commodities.
In Hanoi, China's Vice Finance Minister Li Yong said the government will continue to use measures such as higher interest rates and bank deposit requirements to curb inflation. [ID:nL3E7G421O]
Copper prices dropped to a seven-week low, with three-month contracts on the London Metal Exchange hitting a session low of $9,135 per tonne, the lowest since March 15, compared with $9,350 at the close on Tuesday.
"General risk appetite is under pressure at the moment. There are some fears over China -- will they tighten too much?" said Arne Lohmann Rasmussen, an analyst with Danske bank.
On Wall Street, disappointment with the economic data outweighed encouraging news of mergers and acquisitions. It also left investors more cautious ahead of Friday's key nonfarm payrolls data.
"Friday's jobs report will be important," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. "If we get (200,000 job gains) or above, it will reinforce the idea the economy continues to expand."
A Reuters poll forecast nonfarm job gains of 186,000 for the month of April and private payroll gains of 200,000.
The Dow Jones industrial average <.DJI> fell 66.30 points, or 0.52 percent, to 12,741.21. The Standard & Poor's 500 Index <.SPX> was down 7.24 points, or 0.53 percent, at 1,349.38. The Nasdaq Composite Index <.IXIC> declined 7.13 points, or 0.25 percent, to 2,834.49.
The MSCI All-Country World index <.MIWD00000PUS> lost 0.87 percent, after hitting its highest level in almost three years last week.
In Europe, the FTSEurofirst 300 index <.FTEU3> closed down 1.41 percent, pressured by mining and oil shares. Emerging stocks <.MSCIEF> lost 1.2 percent.
Before this week's decline, world stocks had risen more than 8 percent this year as investors grew confident that strong corporate earnings, robust growth in emerging markets and ample liquidity would keep global growth at a reasonable level.
OIL DOWN FOR THIRD DAY
U.S. crude oil
However, crude is still near a 31-month peak, keeping alive inflation worries.
Silver fell more than 4 percent in a third straight session of sharp losses, also dragging down gold, after the Wall Street Journal reported that billionaire investor George Soros has been selling silver and gold in the past month or so.
Other safe-haven assets were on the rise, though. The benchmark 10-year U.S. Treasury note
Portuguese bond yields fell after the country agreed to a three-year, 78-billion-euro ($116 billion) bailout with the European Union and the International Monetary Fund on Tuesday, becoming the third euro zone country in a year, after Ireland and Greece, to seek financial aid. [ID:nLDE7420RT] (Additional reporting by Wanfeng Zhou, Caroline Valetkevitch, Ryan Vlastelica and Frank Tang in New York and Melanie Burton in London; Editing by Jonathan Oatis)