* Shares fall on fears Europe returning to recession
* China's signal of lower growth ahead weighs
* Oil retreats on fears of slower demand from China
By Herbert Lash
NEW YORK, March 5 (Reuters) - World stock prices slipped on Monday after economic data raised expectations of a recession in Europe and China signaled slower growth ahead.
The euro firmed from near two-week lows despite nervousness over whether Greece will complete a bond swap with private creditors by Thursday as part of a deal to secure a 130 billion euro ($172 billion) bailout and avoid a messy debt default. But oil prices slipped from early highs on the Chinese outlook.
Wall Street stocks fell, following declines in European and Asian stock markets, as investors shrugged off U.S. data showing the massive services sector expanded in February at its fastest pace in a year. A measure of equities' performance in emerging markets fell more than 1.0 percent.
"We are clearly looking at lower growth in Europe and China (and) as predicted, problems in Greece again," said Steve Larkins, head of sales and trading at Seymour Pierce. "The fundies (fund managers) are more than happy to sit on their hands rather than expose themselves further."
The Dow Jones industrial average was down 73.41 points, or 0.57 percent, at 12,904.16. The Standard & Poor's 500 Index was down 8.97 points, or 0.65 percent, at 1,360.66. The Nasdaq Composite Index was down 28.28 points, or 0.95 percent, at 2,947.91.
The FTSEurofirst 300 index of top European shares was down 0.6 percent at 1,080.40.
A downward revision to euro zone surveys of purchasing managers' assessments for February wiped out much of the positive effects of last week's European Central Bank injection of three-year funding to the banks.
"European data this morning was negative for the euro, but a lot of investors are quite short the euro, so we are starting to see some capitulation and selling on those positions," said Charles St-Arnaud, foreign exchange strategist at Nomura Securities in New York.
"I would not read too much into the euro's bounce as there are plenty of headwinds this week," he said.
The euro was slightly higher, climbing about 0.3 percent to $1.3231 after earlier falling to near a two-week low around $1.3172.
MSCI's all-country world equity index fell 0.65 percent to 329.73. Its emerging market index slid 1.4 percent to 1,065.05
Brent crude oil traded near break-even after retreating from early highs to fall below $124 a barrel on the prospect of slower global demand after China cuts its growth target and Iraq said it had raised its oil production to a 30-year high.
Brent crude oil futures for April rose 10 cents to $123.75 a barrel. April crude fell 16 cents to $106.54.
U.S. Treasury debt prices eased as recent evidence the U.S. economic recovery is picking up steam undermined the safe-haven value of government debt.
Losses were limited, however, and yields remained well within recent ranges as poor euro zone data and concerns about Greece's debt swap, along with China cutting its growth target, supported demand for lower-risk assets.
Benchmark 10-year Treasury notes were trading 4/32 lower in price to yield 1.99 percent.
Spot gold prices fell $11.29 to $1,700.60 an ounce.