* ISM manufacturing lowest in three years
* Delta among suitors for Virgin Atlantic stake - sources
* Spain makes formal request for EU bank aid
* Dow off 0.1 pct, S&P 500 flat, Nasdaq up 0.1 pct
By Chuck Mikolajczak
NEW YORK, Dec 3 U.S. stocks barely budged on
Monday, with the S&P 500 and Nasdaq trimming early gains as
disappointing U.S. factory numbers dented optimism spurred by
positive data on China's economy.
Output by China's factories grew in November for the first
time in more than a year, data showed. But that
encouraging signal about the health of the world's
second-largest economy was offset by a surprising contraction in
U.S. manufacturing, which fell in November to its lowest level
in more than three years, according to the Institute for Supply
Management. [ID:n L1 E8N3580]
The market's reaction to the ISM data was somewhat muted,
however, as concerns about budget dealings in Washington on the
"fiscal cliff" remain the primary focus of investors. Political
haggling continues over how to deal with large automatic
spending cuts and tax hikes scheduled to kick in next year that
could tip the U.S. economy back into recession.
"At this point, all you can say about the data is they are
discounting it," said Paul Mendelsohn, chief investment
strategist at Windham Financial Services in Charlotte, Vermont.
"So barring some catastrophe here in terms of the fiscal
cliff, we look pretty stable."
Among other factors serving to offset the ISM report were
two developments in the euro zone: Spain formally requested the
disbursement of more than $50 billion of European funds to
recapitalize its crippled banking sector, while Greece said it
would spend 10 billion euros ($13 billion) to buy back bonds in
a bid to reduce its ballooning debt.
The PHLX Europe sector index advanced 0.6 percent.
"The general feeling underneath here is things are improving
- Europe appears to be improving, at least politically getting
their act together," Mendelsohn said.
The Dow Jones industrial average shed 10.45 points,
or 0.08 percent, to 13,015.13. The Standard & Poor's 500 Index
inched up just 0.62 of a point, or 0.04 pct to 1,417.80.
The Nasdaq Composite Index added 3.68 points, or 0.12
percent, to 3,013.92.
The S&P 500 briefly moved above its 50-day moving average at
about 1,420, a level that the index has been below since Oct.
22, and now serving as a key resistance point for equities.
U.S. Treasury Secretary Timothy Geithner pushed Republicans
on Sunday to offer specific ideas to cut the deficit and
predicted that they would agree to raise tax rates on the rich
to obtain a year-end deal to avoid the fiscal cliff.
Dell shares rose 5.8 percent to $10.19 as one of
the biggest percentage gainers in both the S&P 500 and Nasdaq
100 after Goldman Sachs upgraded its view on the stock to
"buy" from "sell."
Singapore Airlines said it was in talks with
interested parties to sell its 49 percent stake in British
carrier Virgin Atlantic, with sources saying that Delta Air
Lines was among the potential suitors. Delta shares fell
1.8 percent to $9.82.