* Euro zone business activity growth slows as France lags
* Treasuries lifted by limp euro economic data
* Euro dips; upbeat China PMI supports Aussie dollar
* Crude oil falls as Iraqi output worries subside (Adds close of European bond, stock markets)
By Herbert Lash
NEW YORK, June 23 Global equity markets traded slightly lower and the dollar weakened against the yen on Monday after euro zone business activity for June showed growth slowing, with activity in France contracting at the fastest pace in four months.
Shares on Wall Street fell, capping a six-day rally in the benchmark S&P 500 that pushed it to all-time highs.
Prices of U.S. Treasuries rose even as data on U.S. home resales rose more than expected, suggesting that housing was pulling out of a recent slump, and as a measure of U.S. manufacturing and its key subindexes advanced in June to their highest levels in more than four years.
The euro zone's private sector expansion unexpectedly slowed even as companies continue to cut prices to drum up business, according to Markit's Composite Purchasing Managers' Index (PMI), which fell to 52.8 from May's 53.5.
In Treasuries, the largest gains were in longer-dated maturities. The benchmark 10-year note rose 6/32 in price, pushing the yield down to 2.6025 percent.
"Prices are up here mainly because some of the data we got overnight and over the weekend were somewhat on the disappointing side, most notably France," said Stan Shipley, fixed-income strategist at ISI Group in New York.
German 10-year Bund yields, the benchmark for euro zone borrowing costs, fell 3 basis points to 1.32 percent, within reach of the 2014 lows of 1.285 percent. Other euro zone sovereign 10-year yields also dipped.
Bund futures closed 31 ticks higher at 146.14.
MSCI's all-country world stock index fell 0.09 percent, while the FTSEurofirst 300 index of leading European shares closed 0.48 percent lower at 1,388.34.
The Dow Jones industrial average fell 27.31 points, or 0.16 percent, to 16,919.77. The S&P 500 lost 1.33 points, or 0.07 percent, to 1,961.54, and the Nasdaq Composite dropped 1.203 points, or 0.03 percent, to 4,366.833.
The euro struggled against the dollar after the softer business-sentiment surveys, while optimism on China's economic prospects drove the Australian, New Zealand and Canadian dollars higher.
The euro fell 0.04 percent to $1.3594. Against the yen, the dollar was 0.15 percent weaker at 101.91 yen.
Brent crude dropped from last week's nine-month highs as concerns waned that a Sunni Islamist insurgency in Iraq would cut the country's oil exports.
Brent was down 57 cents at $114.24. U.S. crude for August delivery was down 75 cents at $106.08. The July contract expired on Friday.
(Reporting by Herbert Lash; Additional reporting by Nigel Stephenson in London; Editing by Chizu Nomiyama and Leslie Adler)