Wall Street modestly lower after Asia data; earnings eyed

NEW YORK (Reuters) - U.S. stocks were modestly lower on Monday as investors weighed weak economic data in Asia as they looked to the upcoming U.S. earnings season for more evidence on the health of the global economy.

Japan's core machinery orders fell at a record pace of 14.8 percent in May, far worse than the 3.3 percent forecast, while inflation in China eased to a 29-month low of 2.2 percent in June.

The data comes on the heels of Friday's disappointing U.S. jobs report which showed non-farm payrolls grew by only 80,000 in June.

Alcoa Inc will kick off earnings season after the closing bell with the aluminum giant expected to post a 5-cent per share profit for the second quarter. Shares slipped 1 percent to $8.64.

Investors will closely monitor corporate earnings for signs the euro zone debt crisis has dented corporate profits, especially among multinational companies.

"Focusing on macro has been the trend and China reporting weaker than expected inflation data and a sluggish global outlook, all these things are out there and they are in play just like Friday's unemployment number," said Gordon Charlop, managing director at Rosenblatt Securities in New York.

"Ultimately the question is are companies making money - are lower gas prices translating into enough of a relief for consumers that they are spending money on other goods and services - so the next quarter will tell us exactly how sustainable this recovery is."

The Dow Jones industrial average <.DJI> dropped 48.66 points, or 0.38 percent, to 12,723.81. The Standard & Poor's 500 Index <.SPX> lost 4.37 points, or 0.32 percent, to 1,350.31. The Nasdaq Composite Index <.IXIC> fell 7.22 points, or 0.25 percent, to 2,930.11.

Spanish bond yields rose past the 7 percent level viewed as unsustainable by many analysts ahead of a meeting by euro zone finance ministers later in the day. Diplomats said the country will be granted an extra year to reach its deficit targets after it outlines further budget savings to finance the ministers.

Amerigroup Corp jumped 37.9 percent to $88.75 after the company agreed to be acquired by rival WellPoint Inc for about $4.46 billon. WellPoint shares advanced 3.9 percent to $62.24 while fellow health insurer Wellcare Health Plans Inc surged 13.9 percent to $60.14. The Morgan Stanley healthcare payor index <.HMO> climbed 9 percent.

Celgene Corp is one of two companies discussing whether to bid for Human Genome Sciences Inc , which seeks an alternative to a hostile offer by British drugmaker GlaxoSmithKline Plc , a source familiar with the situation said. Human Genome shares slipped 0.1 percent to $13.61.

Boeing Co gained 0.9 percent to $74.38 as the top boost to the Dow after the company said it finalized an airplane order with Air Lease Corp valued at $7.2 billion.

(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)