World stocks slipped for a third session in a row on Wednesday and government bonds and the low-yielding yen gained as poor earnings from U.S. aluminum group Alcoa sparked concerns about other corporates.

U.S. stocks fell more than 2 percent on Tuesday even before Alcoa reported a second consecutive quarterly loss on falling demand and sharply lower prices. First quarter earnings for S&P 500 companies are expected to fall by 37 percent, according to Thomson Reuters data.

Growing concerns ahead of the corporate reporting season that the return of economic optimism and decline of risk aversion may have set in too early are starting to support U.S. Treasuries and Bunds, said Peter Mueller, rate strategist at Commerzbank in Frankfurt. The MSCI world equity index <.MIWD00000PUS> fell more than 1 percent, after a month-long rally pushed it to a two-month high on Monday.

The FTSEurofirst 300 index <.FTEU3> lost 1.2 percent while emerging stocks <.MSCIEF> dropped 2.5 percent.

U.S. crude oil fell 3 percent to $47.68 a barrel after weekly data showed U.S. crude inventories rose more than expected and falling stocks hit risk appetite.

June bund futures rose 45 ticks. Ten-year U.S. Treasuries rose, pushing the yield down to 2.8688 percent.

The yen rose 0.8 percent to 99.69 per dollar. The Japanese government is expected to give details of new spending worth $100 billion or around 2 percent of GDP later on Wednesday.

On a positive note, Japan's service sector sentiment jumped to an eight-month high in March, boosted by the government's plan to hand out one-time payments to each individual.

The dollar <.DXY>, also a low-yielding currency, rose 0.4 percent against a basket of major currencies.

The currency market moved back to risk aversion after optimism had gone a bit too far, said Yoshihisa Kanzaki, currency dealer at Shinkin Central Bank in Tokyo.

But the market overall is expected to be driven by investor position adjustments and profit-taking for the rest of this week ahead of a long weekend for many overseas players and before U.S. financial sector earnings.

(Additional reporting by Emelia Sithole-Materise; Editing by Ruth Pitchford)