* Dollar retreats from gains against euro and yen * Equity markets decline on soft housing, labor data * Bond prices rise on data, but Brent oil falls By Herbert Lash NEW YORK, May 16 (Reuters) - Global equity markets traded mostly flat and the dollar fell against the euro on Thursday after reports on U.S. housing, labor and regional business conditions pointed to soft spots in the American economy. Factory activity contracted in the mid-Atlantic region in May, ground-breaking for new homes tumbled in April and new claims for jobless benefits spiked last week, according to three separate reports. Coupled with soft underlying inflation, the data suggests weak demand as the U.S. economy entered the second quarter, and it curbed expectations the Federal Reserve will scale back its asset-buying program, which has bolstered the equity market. "The dollar was on an uptrend headed into today's number, mostly due to an optimistic view of the U.S. economy," said Vassili Serebriakov, FX strategist at BNP Paribas in New York. "The Fed has fallen short of its mandate on jobs and inflation, so the data highlights the need for further accommodation," he said. Gold hit a four-week low and declined for a sixth straight day for the first time in more than four years as investors spooked by recent price falls favored other assets. Spot gold prices fell $6.18 to $1,386.10 an ounce. Ground-breaking for new U.S. homes plummeted more than expected in April, the Commerce Department said, while the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. Mid-Atlantic region fell. The number of Americans filing new claims for unemployment benefits climbed last week at the fastest pace in six months, the Labor Department said, confounding analysts' expectations for a more modest increase. The dollar fell for the first time in six sessions against the euro, which rose 0.02 percent against the dollar to trade near $1.2889. Major equity indexes traded near break-even, trimming earlier losses, although the tech-heavy Nasdaq index was higher, led by gains in Cisco Systems Inc. Cisco shares surged 11.5 percent to $23.66 after the network equipment maker posted a higher-than-expected quarterly profit and said current-quarter revenue could increase. The Dow Jones industrial average was up 0.46 point, or 0.00 percent, at 15,276.15. The Standard & Poor's 500 Index was down 1.36 points, or 0.08 percent, at 1,657.42. The Nasdaq Composite Index was up 5.17 points, or 0.15 percent, at 3,476.78. Other big tech gainers included Apple Inc, up 1.9 percent at $437.19; Hewlett-Packard, up 1.6 percent at $21.31; and International Business Machines, up 1.3 percent at $205.87. In other data, the U.S. Consumer Price Index posted the biggest decline since December 2008, indicating inflation pressure remains tame and giving the Fed latitude to maintain its current monetary policy. MSCI's world equity index fell 0.04 percent, while the FTSE Eurofirst 300 index of top European shares edged down 0.02 percent to close at 1,245.45. U.S. Treasuries prices advanced and German Bund futures jumped the most in six weeks as the U.S. data raised worries about the economy and underscored the lack of price pressures. The benchmark 10-year U.S. Treasury note was up 18/32 in price to yield 1.8757 percent. German Bund futures jumped 67 ticks to settle at 145.31, its biggest daily gain since March 27. Oil prices rose but Brent oil futures remained below $104 a barrel as the soft U.S. economic data added to a bearish outlook on demand. Brent rose 9 cents to $103.77 a barrel, while U.S. oil gained 53 cents to $94.83.