Oil, stocks off on weak data; Europe shares up

Mon Aug 3, 2015 7:40pm EDT
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By Rodrigo Campos

NEW YORK (Reuters) - Stocks fell and oil futures prices sank to a six-month low on Monday on demand concerns after factory data from China and the United States disappointed.

Brent slumped to its lowest since late January as factory activity in China, the world's second-biggest economy, shrank more than initially estimated last month. The pace of growth in the U.S. manufacturing sector slowed in July and missed expectations.

The resource-linked Canadian dollar was at its weakest in more than a decade against its U.S. peer as crude prices fell.

The U.S. Federal Reserve is widely expected to raise interest rates for the first time in nearly a decade before the end of the year. If Chinese weakness seeps into the U.S. economy, the Fed could reassess its plan to hike rates and markets would have to balance between more support from the central bank and the expectation for slower growth.

"The slowdown in China [is] feeding into a slowdown in Asia, and the question becomes how much of that is feeding into the U.S.?" said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

However, she added: "We’ve started to see more positive data out of Europe despite the Greek situation."

Euro zone factories largely shrugged off Greece's brush with bankruptcy. The Netherlands, Spain and Italy all reported healthy growth, and Italy's expansion was its best in more than four years.

The Dow Jones industrial average .DJI fell 91.66 points, or 0.52 percent, to 17,598.2, the S&P 500 .SPX lost 5.8 points, or 0.28 percent, to 2,098.04 and the Nasdaq Composite .IXIC dropped 12.90 points, or 0.25 percent, to 5,115.38.   Continued...

A trader waits for news while working on the floor of the New York Stock Exchange   in New York, July 8, 2015.  REUTERS/Lucas Jackson