* U.S. and European shares fall, oil rebounds after slump * Chinese data shows manufacturing contracts for 11th month * Dollar rises broadly; euro falls on crisis woes * Spain bond yields fall at auction to lowest since January By Ryan Vlastelica NEW YORK, Sept 20 (Reuters) - U.S. and European stocks fell on Thursday and the euro weakened, after data showing contractions in Chinese and euro zone manufacturing and signs of a struggling U.S. economy underlined worries about global economic growth. Crude oil rose after three days of steep losses, helping equities recover from session lows as energy shares rose. Still, the price of Brent remains down 6 percent on the week on concerns about demand prospects. U.S. manufacturing closed out its weakest quarterly growth rate in three years this month, according to data on Thursday. Contraction in factory activity in the U.S. mid-Atlantic region for a fifth straight month in September also drove home the weak tone that overhangs the U.S. economy. World shares and other risk markets have lost momentum this week as investors take stock after the central banks of the United States, Japan and the euro zone outlined plans for economic stimulus, contributing to a near 17 percent rise in the MNSI global index since June. Markets are grappling with whether prices ran " ahead of themselves a little bit too fast," said Philip Wagner, senior vice president at Bryn Mawr Trust in Devon, Pennsylvania. "You look at the data here today, specifically, nothing is a positive surprise so it doesn't really give the bulls more enthusiasm." The Dow Jones industrial average was down 10.38 points, or 0.08 percent, at 13,567.58. The Standard & Poor's 500 Index was down 3.62 points, or 0.25 percent, at 1,457.43. The Nasdaq Composite Index was down 11.02 points, or 0.35 percent, at 3,171.60. European equities closed 0.1 percent lower, and the MSCI world index shed 0.7 percent. "For now, this is a pause in the rally, not the start of a correction. Investors are taking a breather. Indexes are testing key support levels and they are holding," FXCM analyst Nicolas Cheron said. Hong Kong's Hang Seng index lost 1.2 percent. In the currency market, the euro fell 0.8 percent while the U.S. dollar index rose 0.6 percent. The euro was pushed further from last week's 4-1/2-month high, hitting a one week low of $1.294 before a small recovery. Demand for safe-haven assets rose, pushing up the benchmark 10-year U.S. Treasury note price by 2/32, with the yield at 1.7648 percent. The euro zone purchasing managers index data underlined the effect of the bloc's debt crisis. The composite PMI, which combines data from the manufacturing and services surveys, fell to 45.9 from 46.3 in August, its lowest since June 2009. A figure below 50 indicates contraction. Of the European national PMIs, Germany managed to show improvement, with the manufacturing PMI hitting its highest level since March, but still at a level indicating contraction. China's flash purchasing managers index prompted the initial market gloom as it remained below 50 for an 11th month in a row. "Global growth worries have returned to the surface. It's weighing once again on investor confidence and giving a boost to both the dollar and yen," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. GROWTH WORRIES Spain's 10-year borrowing costs fell to their lowest level since January at a debt auction on Thursday, although the relief may be brief as Prime Minister Mariano Rajoy hesitates over seeking an international bailout that would open the way for the European Central Bank to buy Spanish government bonds. German government bonds, favored by risk averse investors, remained in demand. Bund futures were up 0.3 percent to 140.17, adding to the rebound seen in a week where they began at a 5-1/2-month low. Brent crude prices rose 1.4 percent to $109.64. Prices had fallen recently after Saudi Arabia promised to boost supply. Spot gold, which is at its highest in over half a year, dropped modestly to $1,767.86 an ounce. Problems in Greece are back in focus after wrangling between Athens and inspectors from the European Commission, the ECB and the International Monetary Fund over ways to stabilize the country's debts. The head of one of Germany's biggest banks, Commerzbank, warned on Thursday he thought another Greek debt restructuring would be needed. China's weak data were felt widely across Asian and commodity markets. Metals slipped with copper down over 1.5 percent and the Australian dollar, highly sensitive to its biggest export partner, slipped 0.8 percent.