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Japan's benchmark Nikkei average .N225 was down 0.42 percent, while the broader Topix .TOPX was off 0.47 percent.

MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS was down 0.09 percent, extending a two-week decline, but some markets, including Singapore, were closed for a holiday.

The euro inched higher, pulling away from a 7-week low hit the previous day. It remains vulnerable due to concerns about the debt of peripheral euro zone countries, although it gained some reprieve on Monday after euro zone finance ministers approved an emergency loan program for Portugal.

The dollar edged up 0.1 percent against the yen to 80.90 yen, having regained some ground after having dropped to 79.57 yen in early May, the dollar's lowest level against the yen since mid-March.

U.S. crude futures extended declines on Tuesday amid the global economic concerns and as U.S. industry data was expected to show a fourth-straight rise in the top consumer's crude oil inventories.

Crude was dragged lower as U.S. wholesale gasoline prices fell below $3 a gallon for the first time since March. NYMEX crude for June delivery was down 38 cents at $96.99 a barrel. London Brent crude for June delivery expired on Monday, settling down $1.10 at $112.73.

Gold held steady and silver rebounded from a 5 percent drop the previous session, as some Asian physical buying offset the influence of a slightly stronger dollar.

Spot gold edged up 0.1 percent to $1,490.75 an ounce. U.S. gold futures were little changed at $1,491.

Signs of a slowdown in the U.S. economic recovery pulled U.S. stocks and oil prices lower on Monday.

The Dow Jones industrial average .DJI lost 0.38 percent on Monday. The Standard & Poor's 500 Index .SPX fell 0.62 percent and the Nasdaq Composite Index .IXIC dropped 1.63 percent.

(Writing by Nick Macfie, editing by Jonathan Thatcher)

U.S. oil futures slipped to as low as $98.13 a barrel as the euro fell to a seven-week low against the dollar on renewed worries over Greece's sovereign debt woes.

European stocks were down in early trade on Monday, with the euro zone's blue chip Euro STOXX 50 .STOXX50E index falling 1 percent to a one-month low on renewed jitters about the region's debt crisis.

European banking stocks took a beating, with Deutsche Bank (DBKGn.DE) down 2.4 percent and Societe Generale (SOGN.PA) down 2.1 percent, while the sector's index .SX7P hit a 5 1/2 month low.

The euro hovered near a seven-week low against the dollar as investors sought clarity over how fresh talks on further aid for debt-stricken euro zone countries might pan out. The euro skidded to lowest levels since late March at $1.4048 in Asian trade as news that IMF chief Dominique Strauss-Kahn had been accused of attempted rape added to the uncertainty.

Meeting on Monday, euro zone finance ministers are likely to back a bailout package for Portugal, with new conditions set by Finland, in talks overshadowed by charges against Strauss-Kahn, while the meeting was also expected to pressure Greece to announce more austerity steps to secure further emergency funding. [nLDE74E0N7]

Japan's Nikkei stock average hit a 1-month low to end just under a key technical level on Monday, hurt by volatile commodities as well as concerns about global growth.

On the macro front, the New York Federal Reserve releases its Empire State Manufacturing Survey for May, while the National Association of Home Builders/Wells Fargo issues May housing market index.

On the earnings front, investors expected results from J.C. Penney Co (JCP.N) and Lowe's (LOW.N).

U.S. stocks ended a second week of losses on a down note Friday, reflecting growing worries that stocks are ripe for a pullback.

The Dow Jones industrial average .DJI ended down 100.17 points, or 0.79 percent, at 12,595.75. The Standard & Poor's 500 Index .SPX finished down 10.88 points, or 0.81 percent, at 1,337.77. The Nasdaq Composite Index .IXIC fell 34.57 points, or 1.21 percent, at 2,828.47.

(Reporting by Blaise Robinson; Editing by Hans Peters)

Glencore's IPO has entered the home stretch after a two-week road show, during which time commodity prices nosedived, raising some doubts about the success of the offer. But Glencore closed the books one day ahead of schedule, suggesting that the offer continued to generate interest.

Glencore narrowed the IPO price range to 520-550 pence per share from its previous guidance of 480-580 pence each, a source with direct knowledge of the matter told Reuters on Monday.

The source said the book is multiple times covered, adding that the company and banks are confident the deal can be done at the revised price range.

Underwriters usually send out a new pricing guidance to reflect the range in which the offer has attracted maximum demand.

The recent downturn in commodities markets had raised some doubts about whether the IPO will continue to attract the same demand. The new guidance indicates the company is not willing to sell shares at the bottom of the band as some investors had hoped.

The new range lifts the mid-point of the offer to 535 pence from 530 pence.

Some European fund managers were betting that the rout in commodities markets would give institutional investors the pricing power on the IPO.

Glencore is set to close the IPO books on Tuesday, one day ahead of schedule, with final pricing due on May 19.

Order books for shares in Glencore, the world's largest diversified commodities trader, were fully covered within hours of the start of the sale process, but part of that success is a result of the relatively small stake in the company being placed with funds and because of Glencore's size, which makes it a must-buy for many.

Glencore has sold about a third of the offer to cornerstone investors, who have agreed to a six-month lock-up in return for a guaranteed allotment.

Declines in oil and metals prices are being seen by an increasing number of fund managers and strategists as a signal to get out of riskier areas of the equity market. And that means avoiding things like Chinese IPOs and sticking to the boring stuff, like utilities.

The growing concern is that stocks had priced in an overly optimistic economic path, and the recent breakdown in commodities and shift in equities to safer industries like health care suggest a reckoning in coming months.

Ken Fisher, founder of Fisher Investments which manages about $38 billion in equities. is among those concerned many investors have become overconfident.

"I think expectations for the stock market are a bit on the high side," he said.

The thesis that the economy may be slowing will be tested next week with the publication of two regional manufacturing reports from the New York and Philadelphia regions. They are a precursor to the bigger national ISM surveys published at the start of next month.

However, some say there is room for the market to move higher before taking a turn for the worse.

Bullish investors point to robust first quarter earnings. Just under three quarters of S&P 500 .SPX companies beat Wall Street's earnings estimates and investors have pointed to sturdy revenue growth. The S&P's index of retail stocks .RLX recently hit all-time highs.

Next week there will be earnings from some important retailers, including the nation's largest, Wal-Mart Stores Inc (WMT.N), home improvement companies Lowe's Companies (LOW.N) and Home Depot (HD.N), as well as teen clothing retailer Abercrombie & Fitch (ANF.N).

DEFENSIVES OUTPERFORM

Prominent strategists at Goldman Sachs and Credit Suisse foresee better results for stocks less tied to the economic cycle. Doug Cliggott, head of equity strategy at Credit Suisse, wrote: "Gone is the US equity performance profile that suggested bold optimism on growth."

Commodities have been at the forefront of the selling so far. Big rallies in hard assets such as gold, silver and oil ended in an ugly slump last week. Silver crashed 30 percent in its worst fall since 1980. Oil, which was until recently worrying investors with its sharp ascent, fell around 15 percent.

There are two schools of thought as to why commodities are slumping. One is that the Federal Reserve's $600 billion program to buy Treasury debt has helped investors divert funds to commodities and equities, creating a bubble in those assets, which is now starting to burst.

"Investors and market observers are divided over whether this is a big deal or not," wrote Cliggott, who wrote CS is "in the 'it's a big deal' camp."

The other is that it is a sign of impending weakness in the economy. Copper, known as the "metal with a PhD" for its ability to act as a predictor for the economy given its wide-scale industrial applications, has hit a five-month low.

The reduced appetite for speculative investments has shown in the outperformance of defensive stocks, whose fortunes are less tied to the rise and fall of the economy.

The S&P 500's healthcare .GSPA and utilities .GSPU sectors were the performance leaders over the last month, rising 2.9 percent and 2.6 percent, respectively. That's despite a 1.5 percent fall in year-over-year earnings growth in utilities in the first quarter, worst of the S&P's 10 sectors.

Healthcare, long a go-nowhere sector, has had a whopping rally. The sector has gained for seven straight weeks, and is up 14.9 percent this year, best of the 10 S&P sectors.

Energy .GSPE, down 7.8 percent in the last seven weeks, is the worst performer in that time.

Goldman Sachs says it has become "much less confident in the near-term equity picture," exiting what it called its "top trade" in U.S. banks, and doing the same with a trade that was long industrial shares relative to consumer staples.

Cliggott sees a 10 percent decline at the end of the Fed's so-called QE2 stimulus program -- which is what happened at the end of the first round of Fed buying -- as the "base case" scenario. The firm continues to recommend a short financial/long health care trade, as well as a long consumer staples/short consumer discretionary trade.

EPFR Global, which tracks fund flows, said Friday that global equity funds experienced their first outflow since mid-March.

SMALL CAPS AND IPOS

Small and mid-cap stocks, which typically lead a strong market, have started to see their relative outperformance to large caps wane. Meanwhile, momentum indicators show the strength in S&P 500 is starting to decline as well.

There are also signs of fatigue in the IPO market after a flood of Chinese IPOs and leveraged buyouts at the start of the year.

Shares of Chinese dating website Jiayuan.com (DATE.O) fell in their Nasdaq debut, while social networking site Renren (RENN.N), dubbed China's Facebook, reversed all its gains on its market debut and traded below its offer price.

Goldman argues stocks have been driven further than economic fundamentals justify by heightened risk appetite. Sentiment indicators are elevated but off highs earlier in the year, while the CBOE Volatility Index, or Vix .VIX ,is at pre-financial crisis levels, signs investors may be getting complacent.

Peter Lee, a technical analyst at UBS, is expecting the S&P 500 to run to 1,400-1,450 in the summer before topping out.

Fisher believes elevated expectations will mean the market struggles through the rest of the year. He expects a sideways movement at current levels.

David Joy, chief market strategist of Columbia Management Investment Advisers, one of the largest U.S. fund managers with over $350 billion under management, has been cutting equity exposure over the past three months.

Joy said he started the year with a modest overweight in equities, but has cut that to neutral. That was partly a response to the impending end of the Fed's stimulus program, and partly due to the potential for disruption in the energy markets, he said.

How the markets will react to the end of the Federal Reserve's massive $600 billion stimulus at the close at the end of June is a wild card.

"As we get a little closer to the end I think you could start to see the equity market's volatility start to increase," Joy said.

(Reporting by Edward Krudy and Rodrigo Campos; Editing by Andrew Hay)