World stocks stumbled from the previous day's 1-1/2 month high on Tuesday and government bonds rose as slower-than-expected Chinese growth and a warning on France's triple-A sovereign credit rating prompted investors to cut risks.

The spread between French and German 10-year government bond yields rose to a 16-year high after rating agency Moody's said it may slap a negative outlook on France's credit rating in the next three months. Concerns have been rising over the costs to Europe's major economies if they have to bail out more banks or weaker euro zone members.

China's annual gross domestic product growth eased to 9.1 percent in July-September, slightly below forecasts of 9.2 percent, indicating the world's second-largest economy expanded at its slowest pace since the second quarter of 2009.

Investors' resolve is being tested quite considerably. The situation in Europe is still overhanging in a very large fashion and the Chinese data does add another tick in the box of worries for investors to digest, said Keith Bowman, equity analyst at Hargreaves Lansdown.

The kind of backdrop we have got at the moment is creating ideal conditions for people to take profits.

The MSCI world equity index <.MIWD00000PUS> fell 1 percent. The benchmark index is still up more than 11 percent after hitting a 15-month low earlier this month.

U.S. stock futures fell 0.2 percent, pointing to a weaker open on Wall Street later. European stocks <.FTEU3> fell 1.3 percent while emerging stocks <.MSCIEF> lost 2.3 percent.

Investors are eyeing corporate earnings, with Apple , Bank of America , Goldman Sachs and Intel results due later.

Of the 45 companies in the S&P 500 that have reported earnings, 62 percent have beaten analyst expectations, according to Thomson Reuters data.

The CBOE Volatility index VIX <.VIX>, Wall Street's so-called fear gauge, rose 18.2 percent to 33.39 on Monday, its highest one-day jump since August.

REALITY CHECK

Optimism over a key European Union summit on October 23 waned after German Finance Minister Wolfgang Schaeuble said on Monday that even though European governments would adopt a five-point platform to address the crisis, a definitive solution would not be reached at the summit.

Schaeuble's comments came like a reality check for the markets. It is hard to digest that investors would believe that a plan which would deal with all the problems of the eurozone once and for all would be put on the table, said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

Bund futures rose 86 ticks. The French/German 10-year government bond yield spread widened to a euro era record of 101 basis points. French debt also underperformed its triple-A rated peer the Netherlands.

The dollar <.DXY> gained 0.3 percent against a basket of major currencies. The euro fell 0.3 percent to $1.3691.

U.S. crude oil fell 0.4 percent to $86.03 a barrel.

(Additional reporting by Atul Prakash; editing by Anna Willard)

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