* World share indexes slip as growth worries weigh
* Italian shares weaken, bond yields gain on political
* Euro dips as talk of ECB rate cut gains strength
NEW YORK, March 4 A gauge of global equities
fell on Monday, weighed by sharp drops in Chinese shares, but
stocks in Europe and the United States held near multi-year or
historic highs as slight declines attracted buyers.
China's plans for tighter controls on its property sector
added to concern about slower global growth and dragged stocks
lower, while fresh assurances of global central bank stimulus
gave stocks support.
The euro retreated after last week's soft manufacturing data
increased expectations the European Central Bank could cut
interest rates to boost the region's economy.
On Sunday, China reported that its services sector expanded
in February at the slowest pace in five months, and factory
growth also cooled to multi-month lows. The government could
also increase down-payments and loan rates for buyers of second
homes in cities where prices are rising too quickly.
Stocks on Wall Street faced technical resistance as they
hover near historic highs. The S&P and Dow are up more than 6
percent and 7 percent, respectively, so far this year.
"We are hitting a bit of technical resistance here, but the
momentum is still there and the market is still seen
undervalued. It could be anything that pushes the market above
this level soon," said Robert Pavlik, chief market strategist at
Banyan Partners LLC.
Stocks got support from Janet Yellen, the Federal Reserve's
influential vice chair, who said the U.S. central bank's
aggressive monetary stimulus is warranted given how far the
economy was operating below its full potential.
The Dow Jones industrial average fell 24.29 points or
0.17 percent, to 14,065.37, the S&P 500 lost 1.6 points
or 0.11 percent, to 1,516.6 and the Nasdaq Composite
dropped 3.84 points or 0.12 percent, to 3,165.9.
The large decline in Chinese stocks sent MSCI's world equity
index down around 0.2 percent. European shares
closed down 0.02 percent at 1,168.36 after a 2.1
percent fall in mining stocks, which are highly exposed
to change in the growth outlook.
A lack of progress in talks to form a new Italian government
after last week's inconclusive elections weighed most on the
country's stocks, down 0.85 percent, while 10-year bond
yields rose to 4.879 percent after hitting more
than 5 percent earlier in the session.
Analysts said yields could have climbed higher but for the
European Central Bank's promise to support struggling nations
but there remained doubts over how this could be implemented
without a government able to enact tough reforms.
Rising expectations that euro zone economic worries could
prompt the ECB to cut interest rates sooner than previously
anticipated weighed on the euro.
The euro zone common currency was down 0.2 percent at around
$1.2997, just above Friday's 11-week low of $1.2966.
"There has been increased talk of an ECB rate cut, with at
least one investment house predicting it," said Marc Chandler,
global head of currency strategy at Brown Brothers Harriman. "We
are less sanguine. While the economic data has been soft, the
ECB had anticipated weakness early in the year."
Despite the apparent run from risk on the day, U.S. Treasury
debt prices edged lower as investors weighed recent price gains
against the Italian uncertainty and Chinese growth concerns.
Treasuries could likely stay range-bound for much of the
week as markets await a European Central Bank meeting on
Thursday and key U.S. jobs data on Friday.
"The market's a bit expensive to really go 'gung-ho' and buy
at this point even though there's a lot of risk," said Kim
Rupert, managing director of global fixed income analysis at
Action Economics LLC in San Francisco.
The 10-year U.S. Treasury note fell 8/32 in
price to yield 1.8703 percent, after hitting a fresh six-week
low of 1.827.