Shares slip on gloomy euro zone data; dollar eases

By Herbert Lash NEW YORK(Reuters) - Global equity markets edged 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 slightly, ending a six-day rally in the benchmark S&P 500 that pushed it to all-time highs. The index finished a little more than 1 point off its record. Prices of U.S. Treasuries initially rose even as data showed U.S. home resales increased more than expected, suggesting that housing was pulling out of a recent slump. Also, 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 this month even as companies continue to cut prices to drum up business, according to Markit's Composite Purchasing Managers' Index, which fell to 52.8 from May's 53.5. In Treasuries trading, the largest gains were in longer-dated maturities. The benchmark 10-year note pared its early gains to trade flat, yielding 2.6243 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 0.05 percent, while the FTSEurofirst 300 index of leading European shares closed 0.48 percent lower at 1,388.34. The Dow Jones industrial average closed down 9.82 points, or 0.06 percent, at 16,937.26. The S&P 500 lost 0.26 point, or 0.01 percent, to 1,962.61 and the Nasdaq Composite added 0.64 point, or 0.01 percent, to 4,368.676. 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 pared losses to trade slightly above break-even, at $1.3601. Against the yen, the dollar was 0.13 percent weaker at 101.93 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 fell 69 cents to settle at $114.12. U.S. crude for August delivery settled down 66 cents at $106.17. The July contract expired on Friday. (Reporting by Herbert Lash; Additional reporting by Nigel Stephenson in London; Editing by Chizu Nomiyama, Leslie Adler and Dan Grebler)