GLOBAL MARKETS-World stocks, dollar drop on soft economic data

                                
   * U.S. mid-Atlantic factory, producer price data disappoint
                                
 * Strong JPMorgan results overshadowed by double-dip fears
                                
 * Dollar down broadly on economic data; down 1 pct vs yen
 (Updates with U.S. markets, changes byline, dateline, previous
LONDON)
                                
 By Jennifer Ablan and Natsuko Waki
                                
 NEW YORK/LONDON, July 15 (Reuters) - World stocks dropped
on Thursday as disappointing U.S. economic data overshadowed
strong earnings from JPMorgan Chase & Co. <JPM.N>, while the
dollar extended losses, shedding 1 percent against the yen.
                                
 Among the weak reports, U.S. industrial production eked out
a small gain in June and producer prices fell for a third
month, providing more evidence of sluggish economic growth.
                                
 Growth in factory activity in the U.S. mid-Atlantic region
fell sharply. Economists had expected a rise.
                                
 Investors have been faced all week with strong earnings but
data showing the recovery losing steam, which revived fears the
economy could tip into a double-dip recession.
                                
 "Death, destruction, story at six. Come on, what more do we
need to know here? Double-dip is here, there is no doubt about
it," said Joe Saluzzi, co-manager of trading at Themis Trading
in Chatham, New Jersey.
                                
 Other data showed slowing growth in New York-area
manufacturing activity. But new U.S. weekly claims for jobless
benefits fell to their lowest level in nearly two years.
                                
 Major equity indexes were down on the largely negative
economic figures. The Dow Jones industrial average <.DJI> was
down 108.75 points, or 1.05 percent, at 10,257.97. The Standard
& Poor's 500 Index <.SPX> was down 11.89 points, or 1.09
percent, at 1,083.28, while the Nasdaq Composite Index  <.IXIC>
was down 25.35 points, or 1.13 percent, at 2,224.50.
                                
  MSCI world equity index <.MIWD00000PUS> moved in sympathy
with the U.S. market's open, dropping 2.11 percent. The Thomson
Reuters global stock index <.TRXFLDGLPU> was also down 0.78
percent.
                                
 Strong earnings from JPMorgan Chase, the second-biggest
U.S. bank by assets, weren't enough to offset the economic
data. JPMorgan's earnings jumped to $4.8 billion from $2.7
billion as loan loss reserves declined, setting the bar high
for other big banks soon to produce results.
                                
 In currencies, the dollar was down against a basket of
major trading-partner currencies, with the U.S. Dollar Index
<.DXY> down 1 percent at 82.55 from a previous session close of
83.426.
                                
 The dollar hit a two-month low against the euro <EUR=> and
a basket of major currencies moved in sympathy with U.S.
equities on soft inflation and manufacturing data.
                                
 Figures showing a third straight monthly decline in
producer prices came a day after minutes from a Federal Reserve
policy meeting showed some policymakers think they may need to
do more to boost the economy if a sputtering recovery slows any
further.
                                
 That helped the euro rally to just shy of $1.29 for the
first time since May. Debt trouble in the euro zone had pushed
it below $1.19 last month, but fairly smooth bond auctions in
Greece, Portugal and Spain have since eased concern.
                                
 Against the Japanese yen, the dollar <JPY=> was down 1.29
percent at 87.30 from a previous session close of 88.440.
                                
 CHINA STOCKS FALL AFTER DEBUT
                                
 China's key stock index ended 1.9 percent lower, its
biggest fall in two weeks, as Agricultural Bank of China
disappointed with a lackluster Shanghai debut. AgBank, the most
active stock, ended up 0.8 percent at 2.7 yuan compared with
its IPO price of 2.68 yuan.
                                
 Earlier data showed China's economic growth moderated to
10.3 percent in the second quarter from 11.9 percent in the
first quarter, slightly below forecasts of 10.5 percent
growth.
                                
 All told, Treasuries were one of the biggest beneficiaries
on Thursday. The benchmark 10-year U.S. Treasury note
<US10YT=RR> was up 15/32, with the yield at 2.9955 percent. The
2-year U.S. Treasury note <US2YT=RR> was up 1/32, with the
yield at 0.59 percent. The 30-year U.S. Treasury bond
<US30YT=RR> was up 34/32, with the yield at 3.98 percent.
                                
U.S. light sweet crude oil <CLc1> fell $1.32, or 1.71
percent, to  $75.72 per barrel, and spot gold prices <XAU=>
fell 75 cents, or 0.06 percent, to $1,206.70. But the
Reuters/Jefferies CRB Index <.CRB> was up 0.21 point, or 0.08
percent, at 262.41.
 (Editing by Kenneth Barry)