Global stocks fall after weak global data; yen, oil recover from lows

NEW YORK (Reuters) - Global stock markets fell on Monday as slowing factory activity in China and Europe added to worries about weaker global growth and Apple shares dropped, while the yen briefly hit a seven-year low after Moody's cut its rating on Japan.

Oil prices rebounded after hitting five-year lows, lifted by data suggesting that tumbling prices may have started affecting drilling activity in the fast-growing U.S. shale oil industry.

On Wall Street, Apple shares dropped 2.7 percent and the stock was the most actively traded on Nasdaq. The cause of the decline was not yet clear. Shares of U.S. retailers declined after Thanksgiving weekend in-store sales failed to impress. The S&P 500 retail index <.SPXRT> was down 1.7 percent.

The day's data added to investor caution. Chinese purchasing managers (PMI) data showed manufacturing slowed in November, suggesting the world's second biggest economy was continuing to lose momentum. Factory activity also slowed in France and Germany.

"The places where we are seeing strength are in the more defensive areas of the (stock) market. That's tied to the perceived weakness in global growth," said Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.

The U.S. dollar rose to its highest level against the yen since July 2007, hitting 119.15 yen on the EBS trading platform, immediately after Moody's lowered its rating on the world's third biggest economy by a notch to A1 from AA3, citing Japan's fiscal problems. It ran into profit-taking and was last trading at 118.20 yen, down 0.4 percent on the day.

On Wall Street, the Dow Jones industrial average <.DJI> fell 35.39 points, or 0.2 percent, to 17,792.85, the S&P 500 <.SPX> lost 11.81 points, or 0.57 percent, to 2,055.75, and the Nasdaq Composite <.IXIC> dropped 45.67 points, or 0.95 percent, to 4,745.96.

MSCI's global share index <.MIWD00000PUS> was last down 0.6 percent, and European shares <.FTEU3> were also down 0.6 percent. Emerging market shares tracked by MSCI <.MSCIEF> fell 1.8 percent.

World oil prices are down 40 percent since June, largely on abundant supply. OPEC last week declined to cut production to raise prices. But the data suggesting that lower prices may have started to affect drilling activity in the U.S. shale oil industry could affect supply.

Brent crude fell as low as $67.53 a barrel, its lowest since October 2009, before picking up to $71.08, up 93 cents. U.S. crude oil was up $1.22 at $67.37.

U.S. Treasuries extended a six-session rally, with prices rising on worries about global growth.

The benchmark 10-year Treasury note was up 5/32 to 100.25 in price to yield 2.1762 percent versus 2.196 percent on Friday.

"The news overseas has been bullish for Treasuries," said Jake Lowery, a portfolio manager at Voya Investment Management in Atlanta. "The weaker numbers out of Germany and the downgrade of Japanese government has put some pressure on risk markets."

The Russian rouble was down as much as 8 percent from Friday's Moscow close, though its losses were cut after what traders said may have been intervention by the central bank.

(Additional reporting by Nigel Stephenson in London, and Rodrigo Campos and Michael Connor in New York; Editing by Leslie Adler)

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