GLOBAL MARKETS-Shares, oil fall after weaker-than-expected US data

Mon Apr 1, 2013 10:47am EDT

* U.S. manufacturing expands, but at slower-than-expected pace

* Chinese factory activity also shows tepid improvement

* Euro rebounds after reading of U.S. manufacturing data

* Most European markets closed for Easter Monday

By Herbert Lash

NEW YORK, April 1 (Reuters) - U.S. equities mostly traded lower and oil prices fell on Monday after surveys showed U.S. and Chinese manufacturing in March expanded less than economists had expected.

Major European markets were closed for Easter Monday while several exchanges were shut in Asia, tamping down trading activity.

Declines in the benchmark S&P 500 and Nasdaq market came after the S&P 500 closed at a record high on Thursday. The S&P 500 rose 10 percent in the first three months of the year, its strongest quarter in a year. The Dow climbed 11.3 percent and the Nasdaq gained 8.2 percent during the period.

The pace of expansion in the U.S. manufacturing sector unexpectedly slowed last month, said the Institute for Supply Management. ISM said its index of national factory activity fell to 51.3 from 54.2 in February. The reading was shy of expectations of 54.2, according to a Reuters poll of economists.

China's official purchasing managers index for March came in at 50.9, the highest in 11 months, although a Reuters poll showed economists had expected a rise to 52.0 from February's five-month low of 50.1.

U.S. Treasuries rebounded after the ISM report on U.S. manufacturing, gold prices traded near break-even and the euro extended gains versus the U.S. dollar.

U.S. stocks were lower, with the exception of the Dow, which was trading near break-even.

The Dow Jones industrial average was up 8.60 points, or 0.06 percent, at 14,587.14. The Standard & Poor's 500 Index was down 3.01 points, or 0.19 percent, at 1,566.18. The Nasdaq Composite Index was down 11.07 points, or 0.34 percent, at 3,256.45.

In oil markets, Brent crude fell after release of the Chinese manufacturing data and stayed down after release of the U.S. survey on American factory activity.

"The data came in below market expectations, which could indicate that oil demand growth may not expand quite as quickly as we would like it to," said Carl Larry, president of Houston-based Oil Outlooks and Opinion, about Chinese manufacturing.

"But China's still growing, and that continues to be an underlying support factor long term for the market. Whether they are at 6 percent or 7 percent, they are growing."

Brent for May delivery was down 10 cents at $109.92 a barrel, while U.S. light sweet crude oil fell 93 cents to $96.30 a barrel.

The euro was up 0.22 percent at $1.2840.

MSCI's all-country world equity index fell 0.34 percent.

The benchmark 10-year U.S. Treasury note was up 1/32 in price to yield 1.8486 percent.

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