* MSCI world share index down after weak China data
* S&P 500 down slightly after U.S. services data
* Safe-haven bond prices gain ground
By Caroline Valetkevitch
NEW YORK, Jan 6 World stock indexes dipped on
Monday after services sector data in China and the United States
revived concerns about slow growth, while gold climbed to its
highest in three weeks.
U.S. Treasuries prices rose after the U.S. data, which
raised questions about whether the Federal Reserve might slow
its reduction of bond purchases.
The private index of U.S. service industry activity
unexpectedly fell in December. It goes against recent U.S. data,
including last week's factory activity report, that confirmed
underlying strength in the economy and suggested the Fed was
justified in deciding in December to begin scaling back its
Outside the United States, figures showing that China's
services sector growth slowed sharply last month added to a
stack of disappointing data from the world's second-largest
economy over the past week.
MSCI's world stock index, which tracks 45
countries, was down 0.2 percent, while all three major U.S.
stocks indexes were lower.
The Dow Jones industrial average fell 7.9 points or
0.05 percent, to 16,462.09, the S&P 500 lost 2.6 points
or 0.14 percent, to 1,828.77 and the Nasdaq Composite
dropped 14.677 points or 0.36 percent, to 4,117.229.
Traders are still second-guessing the Fed's assessment of
recent economic data and how it might alter the U.S. central
bank's plan to withdraw its quantitative easing stimulus, said
Peter Jankovskis, co-chief investment officer at OakBrook
Investments in Lisle, Illinois.
"On balance, today's data is not going to raise concerns the
Fed may accelerate the taper," he said.
Wednesday's impending release of the minutes of the December
meeting of Fed policymakers and Friday's non-farm payrolls data
could give further clues on how quickly the Fed is likely to
scale back its huge stimulus program in the coming months.
The U.S. Senate is set to vote at 5:30 p.m. (2230 GMT) to
confirm Janet Yellen as the next chair of the Fed. Yellen, who
has been the Fed's vice chair since 2010, is poised to become
the first woman to head the U.S. central bank. She is widely
seen as continuing the policies set in place by Ben Bernanke,
who will step down as Fed chairman at month's end.
The U.S. and Chinese data was somewhat offset by positive
euro zone data and other U.S. data that was upbeat. Data showed
some signs of gradual recoveries in Italy and Spain, while a
report showed a rebound in new orders for U.S. factory goods.
pan-regional FTSEurofirst 300 ended down 0.2 percent
after erasing earlier gains.
The euro zone Composite Purchasing Managers Index, which
gauges how thousands of manufacturing and services companies
fare every month, rose to 52.1 in December, in line with
forecasts, with readings above 50 indicating growth.
The dollar slipped against the euro and yen after the
weaker-than-expected data gauging the U.S. services sector.
The euro recovered from a one-month low to trade 0.4 percent
higher at $1.3638, while the dollar was last down 0.2
percent to 104.64 yen, according to Reuters data.
In the U.S. bond market, U.S. Treasuries prices rose after
the U.S. services sector data spurred bids for government debt.
The benchmark 10-year U.S. Treasury note rose
8/32 in price to yield 2.965 percent, down 3 basis points from
late on Friday.
"We had a run of stronger-than-expected data in December
that pushed the 10-year yield above 3 percent. We are now seeing
some weaker data so we are seeing it falling below 3 percent,"
said Stan Shipley, bond strategist at ISI Group in New York.
There was plenty of evidence to support the caution China
data has fostered among investors.
Figures on Monday showing China's huge services sector
slowed sharply in December to its lowest point since August 2011
came hot on the heels of a similar official survey on Friday and
two other PMIs last week showing factory activity also soured.
GOLD, BRENT OIL RISE
Gold rose to its highest in three weeks, as declines in the
dollar and equity markets drew investors to the asset.
Spot gold was trading up 0.4 percent at $1,241.40 an
ounce, having earlier hit a one-week high of $1,248.30.
Brent crude oil edged higher as reports of restarted
production at a Libyan oilfield, which hinted at more supply,
were outweighed by doubts about its ability to reach markets.
Brent crude futures for February rose 3 cents to
$106.92 at 1:12 p.m. EST (1812 GMT) after earlier climbing over
$1 to a session high of $107.96. U.S. crude fell 54 cents
to $93.42 per barrel. The contract lost $1.48 a barrel on Friday
and posted its biggest weekly drop since June 2012.
"We're still seeing most of the geopolitical risk hitting
Brent, whether it be Libya or Iraq," said Phil Flynn, analyst at
the Price Futures Group in Chicago.