GLOBAL MARKETS-Gold hits new record as equities fall

* Gold hits record high on renewed safe-have bid

* Equity markets extend losses after Thursday's rout

* Euro jumps in thin liquidity, oil prices falter

* Bank funding concerns, recession fears drive slump (Adds opening of U.S. markets, changes dateline; previous LONDON)

By Herbert Lash

NEW YORK, Aug 19 (Reuters) - Gold jumped to a record high on Friday and global equity markets extended a sharp sell-off as fears of a global recession and a funding crunch for regional banks in Europe intensified.

Gold prices rallied more than 2.5 percent as investors sought refuge from a second day of hefty losses in stocks as equity markets reeled on fears of stalling economic growth around the world.

Wall Street stocks opened sharply lower but then pared their losses, with the S&P 500 <.SPX> and Nasdaq <.IXIC> indices in positive territory.

"At the moment the market is just looking for relative safe havens," said Mitsui Precious Metals analyst David Jollie. "You can see that in the sell-offs across equity markets overnight. The strength of gold is the other side of the coin from that."

Spot gold jumped to record $1,877 an ounce, and was last trading near $1,855, on track for its biggest one-month rise in nearly 12 years in August.

The euro recovered early losses in thin trade, gaining momentum on stop-loss selling. But it remained at risk of coming under renewed pressure from a darkening global economic outlook and worries about funding in the euro zone banking sector. For details see: [ID:nL5E7JJ2XH]

The U.S. dollar index <.DXY> slipped 0.6 percent to 73.817 as a result of a rebound in the euro , up 0.6 percent at $1.4411.

European shares flirted with two-year lows, the FTSEurofirst 300 <.FTEU3> index of top European shares was down 1.7 percent. MSCI's all-country world stock index <.MIWD00000PUS> was off 1 percent.

"The market is very concerned about the deteriorating outlook for global growth in general and the United States in particular," said Marcus Svedberg, chief economist at East Capital, which has 5 billion euros ($7.2 billion) under management.

On Wall Street, the Dow Jones industrial average <.DJI> fell sharply at the opening, but shortly after 10 a.m. EDT, the Dow Jones industrial average was down 16.57 points, or 0.15 percent, at 10,974.01. The Standard & Poor's 500 Index <.SPX> was up 2.93 points, or 0.26 percent, at 1,143.58. The Nasdaq Composite Index <.IXIC> was up 12.09 points, or 0.51 percent, at 2,392.52.

U.S. Treasury yields inched back up from lows last seen in at least 60 years on as some investors took profits from Thursday's bond rally. [ID:nN1E77I09T]

The benchmark 10-year U.S. Treasury note was down 14/32 in price to yield 2.11 percent. The yield at one point on Thursday fell to 1.97 percent.

Yields have dropped almost a full percentage point on the 10-year note in August as disappointing economic data, the Federal Reserve's low interest rate policy and jitters over rising bank funding costs drove investors to safe-haven bonds.

Brent crude rose after Spanish measures to address Spain's economic weakness helped to reverse some of the deep sell-off triggered by concern the world is heading back into recession. [ID:nL4E7JJ09I]

Brent was trading 9 cents higher at $107.08 a barrel. U.S. crude shed 96 cents to $81.45 a barrel. (Reporting by Rodrigo Campos and Karen Brettell in New York; Naomi Tajitsu, Nia Williams, Barbara Lewis and Jan Harvey in London; Harro ten Wolde in Frankfurt; Writing by Herbert Lash; Editing by Dan Grebler)