* 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 mostly lower on Monday after U.S.
manufacturing activity hit a three-year low in November,
offsetting signs of revived growth in China.
In a sign that 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 in November from 51.7 in
The figure was the softest since July 2009, when the U.S.
economy was struggling in the aftermath of the financial crisis.
The November reading may have been affected by Superstorm
Sandy, which hit the U.S. East Coast in late October.
Wall Street declined, as did European markets at their
close, despite upbeat factory data from China and a slower
contraction in European manufacturing. Disappointing data on
U.S. factory activity pulled down stocks and Brent oil.
Political haggling in Washington over 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, which could tip the U.S. economy
"Markets have lately been more optimistic than what the
reality of the negotiations seems to be, and the reality of that
may be starting to set in," said David Carter, chief investment
officer at Lenox Wealth Advisors in New York.
"Until the cliff gets resolved, market upside may be capped
while the downside isn't constrained," Carter said.
The Dow Jones industrial average was down 42.70
points, or 0.33 percent, at 12,982.88. The Standard & Poor's 500
Index was down 4.72 points, or 0.33 percent, at 1,411.46.
The Nasdaq Composite Index was down 3.79 points, or 0.13
percent, at 3,006.46.
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
rose 0.16 percent to close at 1,121.15, after earlier rising to
World shares as measured by MSCI's all-country equity index
edged up 0.03 percent to 332.75.
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.
The euro was up 0.52 percent at $1.3054, while the
U.S. dollar index fell 0.35 percent to 79.87.
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 closing at
$8,005, up from Friday's close at $7,994.
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 3/32 in price to yield 1.63 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 40 cents at $110.83 a barrel.
But U.S. crude rose 18 cents to settle at $89.09 a