GLOBAL MARKETS-World stocks, oil slip on U.S.-Sino trade spat

* Wall Street dips on U.S.-Chinese trade spat

* Dollar loses gains as risk appetite climbs

* Mild profit-taking seen after five-week rally

* U.S. tariff on China tires unnerves investors (Updates with U.S. markets activity, changes byline, dateline; previous LONDON)

By Herbert Lash

NEW YORK, Sept 14 (Reuters) - World stocks and crude oil fell on Monday after a U.S. decision to slap special duties on Chinese tires sparked fears of a widening trade row, although some said the dispute was an excuse for profit taking.

Many investors seemed to take the dispute in stride. The dollar fell against the euro, erasing earlier gains, as investors looked past the U.S. restriction on Chinese tire imports and took on more risk. For more see [ID:nN14507802].

U.S. Treasuries slipped, pulling benchmark yields up from two-month lows, as investors took some profits after a five-week rally in government debt. [ID:nN14433230]

"The markets might jump to the conclusion that this is a protectionist measure but I suspect the markets are just looking for an excuse to take some profits," said Mike Lenhoff, strategist at Brewin Dolphin.

"The markets are looking for a breather and it is nothing more than that. It's just another ordinary day on the market," said Lenhoff.

Equity markets fell in Asia and continued to fall in Europe and the United States. Most emerging markets also slipped.

MSCI's all-country world stock index <.MIWD00000PUS> was down 0.6 percent, paring earlier losses of almost 1 percent, but still on track to break a seven-session winning streak that lifted the index to 11-month highs last week.

MSCI's emerging market index <.MSCIEF> also pared losses, but was still off 1.2 percent.

The decision by U.S. President Barack Obama could open the door to a host of trade complaints against China, creating tensions as Western nations seek support from the world's third-largest economy at G20 meetings this month.

In response, China's commerce ministry said Sunday it launched an anti-dumping investigation into imports of U.S. chicken products and automotive exporters. [ID:nSP459289]

"The fact that we've pared some of our gains this morning suggests that markets have anticipated correctly that we're going to have political pressure as far as tariffs are concerned," said Kevin Caron, markets strategist at Stifel Nicolaus & Co in Florham Park, New Jersey.

At 1 p.m. (1700 GMT), the Dow Jones industrial average <.DJI> was down 19.57 points, or 0.20 percent, at 9,585.84. The Standard & Poor's 500 Index <.SPX> was down 0.20 points, or 0.02 percent, at 1,042.53. The Nasdaq Composite Index <.IXIC> was up 0.54 points, or 0.03 percent, at 2,081.44.

European shares snapped six straight days of gains as weaker banks and energy shares outpaced positive food producers. The U.S.-China row hurt sentiment. [ID:nLE471046]

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares provisionally closed down 0.3 percent at 990.95 after hitting its highest close in 11 months on Friday.

U.S oil prices also slipped on concerns that the top U.S. commodities exchange could move to enforce position limits.

U.S. crude -- which has been looking to stocks and economic data for signs of a turnaround amid weak fuel demand -- traded down 57 cents to $68.72 a barrel.

London Brent crude fell 43 cents to $67.26.

The euro erased losses and moved into positive territory against the dollar on buying of the euro against the pound, said Kathy Lien, director of currency research at GFT Forex in New York.

The euro was up 0.4 percent on the day at $1.4619 after climbing as high as $1.4652. The euro rose about 0.7 percent against the pound to 0.8812 . Sterling fell 0.4 percent against the dollar to $1.6584.

The $70 billion worth of bond supply that hit the market in last week's well-bid Treasury auctions was being digested as the market shifted its focus to economic data due this week.

Reports on U.S. retail sales and regional manufacturing, both due on Tuesday, will be closely watched, traders said.

Recent economic data generally have reflected only a tentative stabilization from the worst recession in decades, but signs of an improving economy could hurt bond prices.

The benchmark 10-year U.S. Treasury note was last down 4/32 in price, yielding 3.36 percent

Japan's Nikkei average <.N225> shed 2.3 percent, while the MSCI index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> slipped 1.5 percent. (Reporting by Edward Krudy, Nick Olivari, Matthew Robinson and Ellen Freilich in New York and Joanne Frearson in London; Writing by Herbert Lash; Editing by James Dalgleish)