* Weak reading of U.S. factory data takes steam out of
* Euro hits 6-week high vs dollar on Greek debt moves
* Crude trims gains after initial rise on upbeat data from
* Spain seeks help for troubled banks; pulls Treasuries
By Herbert Lash
NEW YORK, Dec 3 Global shares and crude oil
pared early gains to trade lower on Monday after U.S.
manufacturing activity hit a three-year low in November,
offsetting signs of revived growth in China.
Wall Street opened higher, following gains in European
equity markets, on upbeat factory data from China and a slower
contraction in European manufacturing. But U.S. shares
subsequently trimmed gains and fell.
The euro leaped to its highest level against the U.S. dollar
in six weeks as concerns abated about debt-burdened Greece and
Spain, while Chinese data allayed worries about global growth.
But concerns over budget dealings in Washington on the
"fiscal cliff" remained the primary focus of investors. Unless
Congress acts, some $600 billion of sharp spending cuts and tax
hikes will take effect starting in January.
"At this point, all you can say about the data is they are
discounting it," said Paul Mendelsohn, chief investment
strategist at Windham Financial Services in Charlotte, Vermont.
"So barring some catastrophe here in terms of the fiscal cliff,
we look pretty stable."
In a sign U.S. manufacturing may be struggling to gain
traction, the Institute for Supply Management said its index of
national factory activity fell to 49.5 from 51.7 in October.
The figure was the softest since July 2009, when the U.S.
economy was struggling in the aftermath of the financial crisis
and may have been affected by superstorm Sandy, which hit the
U.S. East Coast in late October.
The Dow Jones industrial average was down 50.33
points, or 0.39 percent, at 12,975.25. The Standard & Poor's 500
Index was down 4.88 points, or 0.34 percent, at 1,411.30.
The Nasdaq Composite Index was down 5.12 points, or 0.17
percent, at 3,005.12.
European shares gave up most of their gains in a late
sell-off, retreating from a 17-month high following release of
the U.S. manufacturing data and on persistent concerns about the
U.S. fiscal dispute.
The FTSEurofirst 300 index of top European shares
closed up 0.16 percent at 1,121.15, after earlier rising to
World shares as measured by MSCI's all-country equity index
were off 0.03 percent at 332.55.
The euro was up 0.62 percent at $1.3064, while the
U.S. dollar index fell 0.39 percent to 79.837.
Copper touched a six-week high on the promising data from
China, the world's top metals consumer. But doubts about the
soundness of the global economy put a lid on gains.
Benchmark copper on the London Metal Exchange hit
$8,045 a tonne, the highest since Oct. 19, before receding to
$8,015.50, up 0.26 percent.
U.S. Treasuries prices fell on news that Spain is seeking
help for its troubled banks and the Chinese manufacturing data
reduced safe-haven demand for less-risky government debt.
"You got the Spain news, which was expected, but it was
still welcomed news for risky assets. You also had some pretty
good Chinese data. The (bond) market is a little fatigued," said
Jason Rogan, director of Treasuries trading at Guggenheim
Partners in New York.
The benchmark 10-year U.S. Treasury note was
down 5/32 in price to yield 1.6284 percent.
Oil rose above $112 per barrel, spurred by signs that growth
is picking up in China, before trimming gains, with North Sea
Brent turning negative.
Brent futures were off 37 cents at $110.86 per
barrel. U.S. crude rose 6 cents to $88.97 per barrel.