GLOBAL MARKETS-Shares, dollar fall on data; oil retreats
* U.S., European stocks decline, oil slides below $109
* U.S. private-sector employment, services data disappoint
* Investors await ECB, BOJ meetings, U.S. payrolls data
By Wanfeng Zhou
NEW YORK, April 3 (Reuters) - Major stock markets and the U.S. dollar fell on Wednesday after unexpectedly weak growth in U.S. private-sector jobs and services dented optimism about the world's largest economy, while investors awaited central bank policy meetings in the euro zone and Japan.
Brent crude slipped below $109 a barrel as oil stockpiles swelled in the United States, the top oil consumer, where a struggling economy is limiting demand for fuel.
U.S. companies hired at the slowest pace in five months in March as recent strong demand for construction jobs evaporated. Separate data showed the pace of growth in the vast U.S. services sector slowed last month.
The disappointing readings sparked some concern the recent pick-up in U.S. economic growth is losing momentum and injected caution among investors ahead of Friday's all-important government data on employment for March.
"The softer-than-expected figure adds further support to our long-held view that the U.S. economy would slow towards mid-year, seeing sub-2 percent GDP growth in the second quarter," said Andrew Grantham, economist at CIBC World Markets in Toronto.
"This is a negative for stocks and the U.S. dollar, but a positive for fixed income."
Analysts polled by Reuters forecast U.S. nonfarm payrolls growth of 200,000 in March, with the unemployment rate seen holding steady at 7.7 percent.
The MSCI world stocks index slipped 0.5 percent to 358.39.
Wall Street stocks edged lower, though the S&P 500 index remained close to its all-time intraday high.
"There are risks out there, but we've been creeping up quietly for a long time with an impressive cumulative gain, and that will continue so long as we don't have a crisis in the offing," said David Kelly, chief market strategist for JPMorgan Funds in New York.
The Dow Jones industrial average dropped 58.71 points, or 0.40 percent, to 14,603.30. The Standard & Poor's 500 Index fell 9.52 points, or 0.61 percent, to 1,560.73. The Nasdaq Composite Index shed 16.77 points, or 0.52 percent, to 3,238.09.
European shares lost 0.8 percent after surging 1.3 percent the previous day, with heavy falls in the telecoms and mining sectors.
OIL RETREATS AS SUPPLY BUILDS
The dollar index, which measures the greenback versus a basket of currencies, dropped 0.3 percent to 82.695.
The euro rose 0.2 percent to $1.2845, while the dollar fell 0.6 percent to 92.91 yen.
The European Central Bank and the Bank of Japan are both expected to make monetary policy announcements on Thursday.
Analysts said a recent run of weak euro zone data, political turmoil in Italy, and concerns over Cyprus could lead ECB President Mario Draghi to strike a dovish tone in his comments after the meeting.
The BOJ is widely expected to ramp up its bond buying and extend the maturities of the bonds it purchases, although some traders have pared back bets against the yen given already hefty short positions.
Expectations of further easing drove Japan's Nikkei stocks average up 3 percent for its biggest one-day rise in almost two months.
The benchmark 10-year U.S. Treasury note was up 10/32, with the yield at 1.8279 percent.
Brent shed $2.29 to trade at $108.40 a barrel, while U.S crude slid $1.83 to $95.36.
"At the moment, the market is mostly focused on the potential of the surplus of crude oil in the U.S. starting to once again increase," said Dominick Chirichella of the Energy Management Institute.
Further pressure came from concern a prolonged oil pipeline outage in the U.S. Midwest would cause inventories to build up near the delivery point of the benchmark contract in Cushing, Oklahoma.