Oil prices plumbed 5-1/2-year lows on Monday, pulling down emerging market assets and boosting demand for the safe-haven yen, while global equity markets slipped further after last week's rout amid nagging worries about worldwide growth.

Stocks retreated as crude oil prices gave up early gains after the Organization of the Petroleum Exporting Countries restated its determination not to cut output despite a global energy glut.

Major European stock indices fell more than 2 percent, while the Dow and S&P 500 fell about 1 percent before paring losses.

The ruble hit record lows and Russian assets plunged on concern about possible new U.S. sanctions over Ukraine, weak oil prices and one-sided bets that the currency would extend its slide.

The yield rise on U.S. Treasuries was limited by persistent concerns about weakening growth and inflation globally. U.S. stocks dipped even as U.S. manufacturing output posted its biggest gain in nine months in November as production expanded across the board, pointing to underlying U.S. economic strength.

"There's a lot of things going on, but most of them are driven off the drop in oil prices," said Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey. "You had some traders take profits on the early (U.S. stock market) gains once oil moved to negative."

The Dow Jones industrial average .DJI was down 35.77 points, or 0.21 percent, at 17,245.06. The Standard & Poor's 500 Index .SPX was down 2.15 points, or 0.11 percent, at 2,000.18. The Nasdaq Composite Index .IXIC was down 18.59 points, or 0.40 percent, at 4,635.01.

In Europe, the FTSEurofirst 300 .FTEU3 index of top regional shares fell 2.35 percent to close at 1,290.65, while MSCI's all-country world index .MIWD00000PUS, which measures stock performance in 45 countries, fell 0.93 percent to 404.93.

MSCI's emerging markets index .MSCIEF fell 1.61 percent.

Brent crude LCOc1 hit a five-year low near $60 a barrel before paring losses, trading down 63 cents to $61.22. U.S. crude for January CLc1 traded down $1.45 at $56.36 a barrel.

Growth worries have supported bets the Federal Reserve might consider keeping its pledge to leave short-term interest rates near zero for a "considerable period" in its latest policy statement at the end of two-day meeting on Wednesday. [FED/DIARY]

The price on benchmark 10-year Treasury notes US10YT=RR was flat to yield 2.1026 percent.

The euro EUR= was last down 0.14 percent against the dollar, at $1.2442. The dollar was 0.62 percent lower against the yen JPY= at 118.03 yen.