* Greece makes successful return to bond markets
* U.S. jobless claims report unexpectedly strong
* Wall Street, dollar get little lift from jobs data (Adds New York trading; changes byline; dateline previously LONDON)
NEW YORK, April 10 U.S. and European equity markets resumed their downward trend on Thursday, driving investors into safe-haven government bonds, while Greece's much-heralded return to the bond market buoyed euro zone debt.
The benchmark 10-year U.S. Treasury yield fell to its lowest level since the beginning of March. On Wall Street, technology and biotech shares led the way lower, as investors continue to question whether high-flying momentum names have come too far, too fast.
Greece staged a triumphant return to the bond market just two years after its default placed it at the center of the euro zone debt crisis.
Greece drew solid demand at its five-year bond sale, which aimed to raise 3 billion euros and offered a yield of 4.95 percent, beating Athens' 5 percent target. It had been expected to draw in U.S. investors including hedge funds.
Greece's deputy prime minister, Evangelos Venizelos, said the sale was at least eight times oversubscribed. Investors looked to the deal as further evidence that the euro zone's economic recovery is gathering pace.
"It's not a particularly cheap deal for them, but they are on the right track and it shows the debt crisis has eased significantly," said Commerzbank strategist Michael Leister.
Wall Street sagged as investors rotated back into defensive names and sold momentum-driven stocks, and European equity markets fell in tandem.
On Wednesday, U.S. stocks bounced after dovish commentary from the Federal Reserve's minutes from its March meeting. That helped shares in Asia rally overnight and bolstered European equities for a time.
Wall Street's Dow Jones industrial average fell 60.34 points, or 0.37 percent, to 16,376.84, the S&P 500 lost 11.66 points, or 0.62 percent, to 1,860.52, and the Nasdaq Composite dropped 61.438 points, or 1.47 percent, to 4,122.462.
The global MSCI All-Country World index was down 0.2 percent. The FTSEurofirst 300 index of leading European companies lost 0.6 percent, shedding earlier gains.
European shares felt the sting of weak economic data, with Italy reporting softer-than-expected industrial output while a discounted share placement by Iberdrola triggered a selloff in Spanish utilities.
U.S. Treasuries rallied on the weakness in stocks ahead of an auction of $13 billion auction of 30-year bonds. The 10-year Treasury note rose 14/32 to drop its yield to 2.639 percent.
Initial jobless claims declined to a surprising seven-year low on Thursday, to a seasonally adjusted 300,000 for the week ended April 5.
"It's collaborating with the other signals we have been seeing, which is the jobs market is slowly improving," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania.
The Fed minutes took a toll on the U.S. dollar on Thursday, sending the greenback to three-week lows against the yen and the Swiss franc, as investors who had positioned for a gradual tightening in monetary policy were driven to reverse course.
The dollar has fallen versus the yen in four of the last five trading days. Against the Swiss franc, the dollar weakened for a fourth straight session.
"The minutes were laced with dovish undertones," said Scott Smith, senior FX trader and market analyst, at Cambridge Mercantile Group in Calgary, sending "market participants into a 'risk-on' buying frenzy."
The dollar was down 0.3 percent versus the yen at 101.64 yen, having fallen to 101.39, its lowest level since March 19. The dollar slipped against the Swiss franc to 0.8768 franc, its lowest in three weeks.
A drop in China's exports stoked concerns about demand in the world's second-biggest economy and pushed the oil price down toward $107 a barrel. OPEC also lowered its 2014 forecast of oil demand.
The fall in Chinese exports last month marked the first time they have declined for two months in a row since 2009.
Gold rose and touched a 2-1/2-week high as the dollar dropped. Spot gold hit its highest level since March 24 at $1,324.40 an ounce earlier, before easing to $1320.30, a gain for the day of 0.56 percent.
(Reporting by Michael Connor in New York; Additional reporting by Sudip Kar-Gupta in London and Gertrude Chavez-Dreyfuss, Chuck Mikolajczak and Richard Leong in New York; Editing by Leslie Adler)