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GLOBAL MARKETS-Stocks, emerging markets swoon on China data; euro up

* Weak China manufacturing hits stocks, global emerging markets

* Euro lifted by strong German-led euro zone PMIs

* U.S. Treasuries up on safe-haven bids

NEW YORK, Jan 23 (Reuters) - U.S. stocks and global emerging markets sold off sharply on Thursday on disappointing Chinese manufacturing data and weak company earnings, while the euro rose against the dollar after encouraging survey results on the euro zone's private sector.

European shares backed away from their lofty multi-year highs hit earlier in the week as caution set in over global growth trends.

The MSCI emerging equities index fell 1 percent to its lowest in nearly two weeks while emerging sovereign debt spreads widened by 9 basis points to 352 bps over U.S. Treasuries. Selling was seen in emerging currencies as well, with the Turkish lira earlier touching a record low, the rouble hitting a five-year low and Argentina's peso down 17 percent.

The slide extended to commodities, with the London-traded Brent crude oil slipping below $108 a barrel after weak data from the world's top two oil consumers revived worries over the outlook for demand.

U.S. Treasuries prices rose as the losses on Wall Street and data suggesting a slowing in Chinese manufacturing revived safe-haven bids for bonds. Data on domestic jobless claims also suggested a moderate pace of job growth but not enough for the Federal Reserve to accelerate its pace of reducing its bond-purchase stimulus.

In U.S. stocks, disappointing earnings reports from bellwether names such as McDonald's Corp added to investor sentiment already dented by troubling report on China's manufacturing sector.

The report, showing a mild manufacturing slowdown extending into the new year in the world's second-largest economy, sparked selling in the popular S&P 500 E-mini futures, which carried into the cash market's open. Financials and materials were the weakest of the S&P's sectors on Thursday.

"The China data continues to be persistently weak, we don't view this as a one off kind of number and we do view the PMI series as especially credible," said Jim Russell, senior equity strategist for U.S. Bank Wealth Management in Cincinnati.

McDonald's Corp's reported weaker-than-expected revenue as fewer customers ate at its restaurants. Shares rebounded from earlier losses to climb 0.6 percent to $95.48.

Netflix Inc shares surged 17 percent to $392.34 as the best performer on the S&P 500. The world's largest video-streaming company's quarterly earnings late Wednesday showed it added more than 2.3 million U.S. customers in the fourth quarter.

By 11:42 a.m. EST (1642 GMT), the Dow Jones industrial average was down 162.60 points, or 0.99 percent, at 16,210.74. The Standard & Poor's 500 Index was down 16.73 points, or 0.91 percent, at 1,828.13. The Nasdaq Composite Index was down 36.85 points, or 0.87 percent, at 4,206.15.

In U.S. Treasuries, the benchmark 10-year note was up 16/32, its yield at 2.8011 percent.

The euro climbed as purchasing manager indices rose across the euro zone, led by Germany, the region's biggest economy. The gains fueled hopes the bloc is finally emerging from its debt crisis - contraction even slowed in France, the euro zone's laggard.

The euro gained almost a full cent against the U.S. dollar to $1.3620. It also recovered some of the ground it lost to the UK pound on Wednesday, when it hit a 1-year low against sterling.

Despite the stronger PMI data out of Europe, stocks in the region fell, unable to extend gains from earlier in the week.

The pan-European stock index FTSEurofirst fell 1.2 percent to 1,330.96, retreating from Tuesday's 5-1/2 year highs. The top European shares index declined by 1.1 percent to 3,116.28.

World stocks fell 0.7 percent to 404.54.

The euro rose almost 1 percent against the dollar to $1.3675 . It climbed as high $1.3677, its strongest level since Jan. 15.

The currency worst hit by the weak Chinese data was the Australian dollar, which shed a three-quarters of a U.S. cent to $0.8773. Speculators sold it as a liquid proxy for growth in the Asian region.

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