* German GDP drop worst since 2009, France also contracts * U.S., European indexes pare losses to trade near break-even * U.S. Treasury debt rises on safe-haven appeal * U.S. crude rebounds on U.S. unemployment claims By Herbert Lash NEW YORK, Feb 14 (Reuters) - Global equity markets fell on Thursday on news the euro zone slipped deeper into recession than expected in late 2012, while the dollar extended gains against the euro after data showed U.S. jobless claims fell more than expected last week. The euro zone's 17-country economy shrank 0.6 percent, with Germany contracting 0.6 percent on the quarter, official data for gross domestic product showed, marking its worst performance since the global financial crisis was raging in 2009. Germany is expected to rebound but the figures suggest the bloc as a whole could remain in recession in the first quarter of this year, despite a recent jump in market sentiment as fears that the currency bloc could fall apart faded. U.S. stocks pared initial losses to trade near break-even, with news that Warren Buffett's Berkshire Hathaway and 3G Capital will pay $23.2 billion in cash to buy food maker H.J. Heinz, helping to turn investor sentiment. Berkshire and the private equity firm will pay $72.50 per share, a 19 percent premium to the stock's all-time high. "The market has weakened because of the GDP numbers," said Barclays commodities analyst Miswin Mahesh. "It's been a macro sell-off this morning with the GDP numbers coming out rather than any fundamental move in itself. Most asset classes have sold." MSCI's all-country world equity index fell 0.1 percent to 356.37, and the FTSEurofirst 300 index of top European companies slipped 0.01 percent to 1165.50. The Dow Jones industrial average was up 1.85 points, or 0.01 percent, at 13,984.76. The Standard & Poor's 500 Index was up 0.27 points, or 0.02 percent, at 1,520.60. The Nasdaq Composite Index was down 2.00 points, or 0.06 percent, at 3,194.88. The yen rallied to session highs versus the dollar as investors pared bearish bets on the Japanese currency. The dollar fell as low as 92.92 yen and last traded at 93.01, down 0.4 percent on the day. The euro fell 0.86 percent to 1.3337 against the dollar. Oil prices initially fell after euro zone figures curbed expectations of accelerating global growth and higher energy demand. The stronger-than-expected drop in U.S. jobless claims last week helped buoy U.S. crude markets, and Brent rebounded to trade at break-even. Brent crude oil fell 8 cents to $117.80 a barrel. April Brent futures became the front-month contract on Thursday. U.S. crude rose 40 cents to $97.41. U.S. Treasuries yields edged back from 10-month highs on the euro zone data, helping boost demand for safe-haven debt. The benchmark 10-year U.S. Treasury note was up 4/32 in price to yield 2.0416 percent.