By Lewis Krauskopf
NEW YORK (Reuters) - World stocks fell for a third straight day on Friday on pessimism about global economic growth and trade tensions, and were set for their first weekly drop this year, while the U.S. dollar was on track for its biggest weekly gain since August.
MSCI's gauge of stocks across the globe shed 0.86 percent, and was set to fall this week following six consecutive weekly increases.
Investors were digesting economic and trade developments from a day earlier, when the European Commission sharply cut its forecasts for euro zone growth this year and next, while President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.
Thursday's trade developments "took off the table what the market was probably starting to price in, which was a resolution by March 1," said Anthony Saglimbene, global market strategist at Ameriprise Financial in Troy, Michigan.
"It just adds to the fact that investors want some of these trade tensions off the front pages and it doesn't look like we are going to get that," Saglimbene said.
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On Wall Street, the Dow Jones Industrial Average fell 252.6 points, or 1 percent, to 24,916.93, the S&P 500 lost 20.9 points, or 0.77 percent, to 2,685.15 and the Nasdaq Composite dropped 46.75 points, or 0.64 percent, to 7,241.60.
"Slower global growth, trade tensions and the fact that we have moved an incredible amount off of the December lows probably means that stocks were a little bit overbought and we may be trading in a range for a little while," Saglimbene said.
The pan-European STOXX 600 index lost 0.71 percent.
The dollar edged higher against a basket of currencies, keeping it on track for its strongest weekly gain in six months, as traders piled into the greenback in a safe-haven move on worries about a weakening global economy.
The dollar index rose 0.1 percent, with the euro down 0.11 percent to $1.1327.
"The rally that propelled the dollar broadly higher last year has enjoyed renewed life with U.S. growth remaining solid while peers abroad lose momentum," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
U.S. Treasury yields fell for a fourth straight session.
Benchmark U.S. 10-year notes last rose 6/32 in price to yield 2.6321 percent, from 2.654 percent late on Thursday.
Oil prices inched up but were heading for a weekly loss. Worries about a global economic slowdown weighed while OPEC-led supply cuts and U.S. sanctions against Venezuela provided crude with some support.
U.S. crude rose 0.15 percent to $52.72 per barrel and Brent was last at $61.77, up 0.23 percent on the day.
(Additional reporting by Richard Leong in New York and Ritvik Carvalho in London; Editing by Susan Fenton and Phil Berlowitz)