(Corrects analyst's affiliation in paragraph 4)
* Global share indexes hit all-time high
* S&P 500 hits record on growth bets despite U.S. GDP contraction
* U.S. bond yields slip to 11-month lows
By Angela Moon
NEW YORK, May 29 (Reuters) - Global equity markets hit an all-time high on Thursday as investors brushed off weaker-than-expected U.S. economic data, while benchmark U.S. Treasury yields fell to 11-month lows.
The S&P 500 hit another intraday high despite first-quarter GDP data showing the U.S. economy contracted 1 percent. Better-than-expected jobless claims reflecting a strengthening labor market and merger activity also boosted sentiment.
The dollar trimmed early losses against major currencies as traders focused on a strengthening U.S. economy.
"Once you get beyond the headline number and look under the hood, things don't really look so bad," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York. "Inventories were to blame for a lot of it and that bodes well for the future."
The MSCI World Index, up 1.4 percent since the last ECB policy meeting, gained 0.2 percent.
Wall Street's Dow Jones industrial average added 7.41 points, or 0.04 percent, to 16,640.59. The Standard & Poor's 500 Index was up 3.89 points, or 0.20 percent, at 1,913.67. The Nasdaq Composite Index was up 10.74 points, or 0.25 percent, at 4,235.82.
European shares held near multi-year highs, with the pan-European FTSEurofirst 300 index closing up 0.1 percent at 1,379.05, within a whisker of a near six-year high of 1,380.52 reached this week.
The euro, which had fallen around 2 percent against the dollar over the same period, consolidated just above a three-month low of $1.3584.
Yields on benchmark 10-year Treasuries last traded at 2.441 percent. The yield on 30-year bonds was near 3.273 percent, an 11-1/2-month trough.
"The bond market is priced in for a pretty weak economy already. Everybody knew it was going to be a contraction even though it's a bigger drop than what they had thought. There's not more room for yields to move lower," said Craig Dismuke, chief economic strategist at Vining Sparks in Memphis, Tennessee.
Gold extended losses to a third straight session, hitting 16-week lows as the dollar hovered near a two-month high, while weak physical demand in top buyer China also weighed.
Spot gold fell to $1,251.50 an ounce - its lowest since Feb. 4 - in early trade and was down 0.4 percent at $1,253.33. It dropped nearly 3 percent over the past two sessions.
Oil rose on signs of stronger demand from top oil consumer the United States. Brent was up 44 cents at $110.25 a barrel after losing 21 cents on Wednesday. U.S. crude oil gained $1.07 to $103.79.
(Reporting by Angela Moon; Editing by Dan Grebler)