* World stocks' MSCI index hits lowest since mid-April
* Euro seesaws near break-even
* Oil off as dollar strengthens, U.S. weekly data on tap (Updates prices, changes comments, adds gold)
By Rodrigo Campos
NEW YORK, May 17 (Reuters) - World stocks fell to a one-month low on Tuesday as data spurred a new wave of doubts over the global economic recovery and on worries about debt-laden euro zone nations, while oil tumbled on the economic outlook and a firmer dollar.
U.S. housing starts and building permits fell in April and factory output fell for the first time in 10 months as Japan's earthquake interrupted the supply of parts to auto makers.
In Europe, German investor sentiment fell more than expected in May, a sign that surging growth in Europe's largest economy is set to ease over the course of the year. In the UK, annual inflation hit a 2-1/2-year high in April.
Wall Street stocks fell as the weak data added to concerns the recovery is taking longer than expected. Oil prices slid more than 2 percent as the weak U.S. data spurred demand worries and as the dollar strengthened.
"The economic data has not been particularly good," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. "This whole Europe thing is wobbly again and it doesn't seem like anyone has got a reasonable solution."
"Oil is down again today so commodity related stocks are down and that drags on everything as well. So when you add it all up together, it ain't a good day for the market."
The euro zone's blue chip Euro STOXX 50 <.STOXX50E> index fell 0.8 percent, down for the fourth consecutive session, after the chairman of the euro zone finance ministers suggested Greece's debt could undergo a "soft" restructuring.
World stocks as measured by MSCI <.MIWD00000PUS> were down 0.8 percent, after earlier hitting the lowest level since mid-April.
The Dow Jones industrial average <.DJI> dropped 143.30 points, or 1.14 percent, to 12,405.07. The Standard & Poor's 500 Index <.SPX> fell 8.84 points, or 0.66 percent, to 1,320.63. The Nasdaq Composite Index <.IXIC> lost 21.03 points, or 0.76 percent, to 2,761.28.
Hewlett-Packard Co
The Reuters/Jefferies CRB index of commodities <.CRB> was on track to close at its lowest level since late January.
In London, July Brent crude
"There's a reassessment of the fundamentals, and there's a perception that the current price is too high," said Christophe Barret, oil analyst at Credit Agricole Corporate and Investment Bank. "With demand being affected by the high oil prices ... they have to correct."
Investors also face the end of the U.S. Federal Reserve's $600 billion asset purchase program next month. The flow of cash generated by the program, coupled with ultra low interest rates, has fueled investments in higher-yielding assets for the past months. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asset moves since QE2 was first signaled by the Fed: http://r.reuters.com/gew59r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GREECE DEBT WEIGHS ON EURO
The euro seesawed against the dollar, driven by concerns that Greece might restructure its massive debt.
Greece's foreign minister, Spyros Kouvelis, said Athens was open to a "soft" debt restructuring if needed. His comments came after euro zone officials, including Jean-Claude Juncker, chairman of the euro zone finance ministers, said for the first time on Tuesday that Greece may have to ask investors to extend the maturities of the Greek debt or agree to a soft restructuring.
"We're going to hear a lot of back and forth as to what politicians and other European officials think, and it would be hard for the euro to find a clear direction," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York.
The euro was last at $1.4140
Copper was also dragged lower by the firmer dollar and worries over the economic recovery. Benchmark copper <.CMCU3> was at $8,780 a ton versus $8,839 at Monday's close. (Additional reporting by Chuck Mikolajczak and Gertrude Chavez-Dreyfuss; Editing by Leslie Adler)