GLOBAL MARKETS-Bond yields rise, dollar climbs on U.S. data; stocks down
* Treasuries prices fall further on Midwest report * Dollar climbs off 3-week low * Wall Street flat in mixed trading after strong Midwest business data By Herbert Lash NEW YORK, May 31 (Reuters) - U.S. and German bond yields rose and the dollar advanced on Friday after improved factory activity in the U.S. Midwest and rising consumer sentiment sparked a move out of safe-haven assets. But investors remained cautious on U.S. stocks while equities on world markets were generally lower, led by declines in Europe. The dollar advanced after data showed U.S. Midwestern factory activity regaining speed. While the factory data added fuel to growing speculation the Federal Reserve may begin to taper its asset-buying program, the Fed's favorite gauge of inflation showed price rises well under its target rate, making a pullback less likely anytime soon. U.S. and German government debt prices reversed course and fell after the Institute for Supply Management-Chicago business barometer rose to 58.7 from 49 in April, handily beating economists' expectations for a reading of 50. The dollar rose against several key currencies and was headed for its eighth straight month of gains against the yen. Investors and traders are grappling with whether the Fed, looking at a stronger economy, will choose to end its program as stocks and housing prices surge. "If you get the hint or the idea that they're going to start to trim purchases then this is the volatility that's going to be created around it," said Sean Murphy, a Treasuries trader at Societe Generale in New York. The Dow Jones industrial average was up 0.38 point, or 0.00 percent, at 15,324.91. The Standard & Poor's 500 Index was down 1.94 points, or 0.12 percent, at 1,652.47. The Nasdaq Composite Index was up 2.43 points, or 0.07 percent, at 3,493.73. Wall Street got a boost from a Thomson Reuters/University of Michigan survey that showed greater optimism over the economic outlook and personal finances pushed U.S. consumer sentiment to its highest level in nearly six years in May. A measure of global equities, MSCI's all-country world equity index, fell as much as 0.7 percent, though it recovered somewhat to trade 0.63 percent lower. The benchmark 10-year U.S. Treasury note fell 20/32 in price to yield 2.189 percent. German Bund futures also retreated in rocky trade to trade down 19 ticks at 143.54. In Europe, the FTSEurofirst 300 index leading regional shares finished 0.92 percent lower at 1,216.17, the lowest close since earlier in the month. The index rose 1.6 percent in May to record the best monthly winning streak in its 16-year history. The euro fell to a session low of $1.2945 and was last at $1.2965, down 0.64 percent on the day. The dollar rose 0.15 percent to 100.87 Japanese yen. A measure of global stock markets was down 0.6 percent at 369.56. U.S. oil prices fell below $93 a barrel, extending losses after weak consumer spending data. Members of the Organization of Petroleum Exporting Countries agreed to leave their output target unchanged, as expected, with little impact on markets as a result. Brent oil was $1.11 lower at $101.08 a barrel, while U.S. oil was down 75 cents at $92.86 a barrel.