Oil, stocks off on weak data; Europe shares up

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.

MSCI's measure of stocks across major markets globally <.MIWD00000PUS> fell 0.3 percent and Nikkei futures were down 0.6 percent ahead of Tuesday trading.

The pan-European FTSEurofirst 300 <.FTEU3> closed up 0.7 percent.

In Athens, stocks <.ATG> plunged 16.2 percent on the first day of trading after a five-week shutdown. The trading suspension was part of capital controls imposed to prevent a collapse in Greece's banks that would have likely pushed the country out of the euro zone.

COMMODITIES SLUMP

Oil prices tumbled on the U.S. and China factory data and were also weighed down by a poll last week that showed OPEC output reached the highest monthly level in recent history in July, reinforcing the idea that Saudi Arabia and other key members are focused on defending market share.

Brent fell 4.9 percent to $49.65 a barrel after touching an intraday low of $49.36, the lowest since Jan. 30. U.S. crude fell 3.8 percent to $45.34 a barrel after hitting the lowest in more than four months at $45.08.

Copper dropped 0.2 percent after earlier hitting its weakest in six years.

The commodity-linked Canadian dollar hit its lowest in 11 years versus the greenback and the Australian dollar was near a more-than-six-year low hit last week against the U.S. currency.

The euro ended the session down 0.3 percent at $1.0949.

"The drop in the Greek stock market has put the euro under slight pressure," said Yujiro Goto, currency strategist at Nomura.

U.S. long-dated and benchmark Treasuries yields hit their lowest levels in two months on the weaker-than-expected U.S. data.

"The market now is taking score of every single data print between now and September, and if the balance continues to shift more toward weaker data than stronger data, it may make September a coin flip," said George Goncalves, head of U.S. rates strategy at Nomura Securities International in New York, referring to some expectations that the Fed may hike rates after its September meeting.

Benchmark 10-year Treasury notes were last up 16/32 in price to yield 2.15 percent, from a yield of 2.205 percent late Friday. U.S. 30-year bonds were last up 1-18/32 in price to yield 2.851 percent, from a yield of 2.928 percent late Friday.

(Additional reporting by Sam Forgione and Karen Brettell; Editing by Dan Grebler)

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