GLOBAL MARKETS-Stocks slide on surging virus cases, stimulus doubts; dollar rises

* Market recovery may take longer than hoped - OPEC official

* Graphic: 2020 asset performance (Updates prices, changes comment, dateline; previous LONDON/SYDNEY)

NEW YORK, Oct 26 (Reuters) - Shares fell across the globe on Monday as surging coronavirus cases in Europe and the United States clouded the world economic outlook, giving the dollar a safe-haven boost.

The United States, Russia and France set new daily records for coronavirus infections as a resurgence of the virus swelled across parts of the Northern Hemisphere, forcing some countries to impose new curbs.

The spreading pandemic, along with no clear progress on a U.S. stimulus package and caution ahead of the Nov. 3 U.S. presidential election dragged the MSCI world equity index down.

“The market is vulnerable to these ‘bad headlines,’ because investors are generally so optimistic right now,” said Willie Delwiche, investment strategist at Baird in Milwaukee.

MSCI’s gauge of stocks globally hit a record high in September and brushed against it earlier this month.

“The market is set up for disappointment at this point,” Delwiche said.

The Dow Jones Industrial Average fell 712.83 points, or 2.52%, to 27,622.74, the S&P 500 lost 73.34 points, or 2.12%, to 3,392.05 and the Nasdaq Composite dropped 189.90 points, or 1.64%, to 11,358.38.

The pan-European STOXX 600 index lost 1.72% and MSCI’s gauge of stocks across the globe shed 1.69%.

Emerging market stocks lost 0.66%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.41% lower, while Japan’s Nikkei fell 0.09%.

Europe became the second region after Latin America to surpass 250,000 deaths on Saturday, according to a Reuters tally, as many European countries reported their highest number of COVID-19 cases in a single day.

Sentiment was also hit by a survey showing German business morale fell in October for the first time in six months.

Reports of progress in a COVID-19 vaccine being developed by the University of Oxford and manufactured by drugmaker AstraZeneca Plc helped limit some of the market sell-off, analysts said.

As markets increasingly price in the likelihood of a Democratic president and Congress which would likely result in a rise in government spending and borrowing, U.S. 10-year Treasury yields hit their highest since early June last week at 0.872% .

“We have raised the probability of a Democratic sweep, already our base case, from 40% to just over 50% and have increased our expectation of (Democratic presidential candidate)Biden to win from 65% to 75%,” NatWest Markets analysts said. “We see steeper U.S. yield curves and a weaker USD as likely to prevail in our base case.”

Benchmark 10-year notes last rose 13/32 in price to yield 0.7977%, from 0.841% late on Friday.

BlackRock Inc, the world’s largest asset manager, on Monday downgraded U.S. Treasuries and upgraded their inflation-linked peers ahead of the U.S. election.

Despite encouraging news about a COVID-19 vaccine out of Oxford, surging coronavirus cases sent investors to the safety of the dollar.

“Skittish investors are scooping up the greenback as virus cases accelerate around the world, stimulus talks in Washington remain in limbo, and trepidation is on the rise ahead of America’s presidential election,” said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

The dollar index rose 0.316%, with the euro down 0.43% to $1.1808.

The Japanese yen weakened 0.15% versus the greenback at 104.90 per dollar, while sterling was last trading at $1.3007, down 0.25% on the day.

In commodity markets, spot gold added 0.2% to $1,904.46 an ounce. Silver fell 1.02% to $24.33.

Oil prices extended last week’s losses. OPEC’s secretary general said an oil market recovery may take longer than hoped as coronavirus inflections rise around the world, and OPEC and its allies would “stay the course” in balancing the market.

U.S. crude was down 3.64% at $38.40 per barrel and Brent was at $40.37, down 3.35% on the day.

Reporting by Rodrigo Campos; additional reporting by Lewis Krauskopf and Gertrude Chavez-Dreyfuss in New York, Ross Gerber in Boston, Tom Arnold in London and Wayne Cole in Sydney; Editing by Susan Fenton