(New throughout, updates prices, market activity and comments
to include gold and oil settlement, close of U.S. markets)
* French, German and euro zone PMIs weaker than expected
* Euro zone bond yields slide, U.S. Treasuries also fall
* Wall Street ekes out modest gain as Apple shares rise
* Gold at 2-week highs on economic growth fears
By Herbert Lash
NEW YORK, Sept 23 (Reuters) - The dollar edged higher while
global shares slid on Monday as euro zone equities clocked their
worst day in a month after dismal business activity readings in
Europe deepened fears of a looming recession there.
Bond yields across the euro area tumbled after German
private sector activity shrank for the first time in 6-1/2 years
in September as a manufacturing recession worsened and
service-sector growth also lost momentum. Growth also slowed unexpectedly in France, the only other
euro zone country for which IHS Markit's flash composite
Purchasing Managers' Index is published.
Germany's DAX stock index .GDAXI fell 1% to its biggest
one-day fall since Aug. 23. The pan-European STOXX 600 index
.STOXX lost 0.80%.
Copper prices fell to their lowest in 2-1/2 weeks on weak
demand prospects, reinforced after U.S.-China trade talks failed
to yield a breakthrough last week.
"Trade tensions between the two largest economies in the
world are having an impact ... the dreadful manufacturing
figures from Germany this morning is a great example of how the
problem spills out beyond the U.S. and China," said CMC Markets
analyst David Madden in London.
Marc Chandler, chief market strategist at Bannockburn Global
Forex LLC said the euro zone flash PMI dashed hope that the
worst was past.
The euro zone economy is not showing convincing signs of a
rebound and a persistent downturn in manufacturing puts at risk
the rest of the economy, European Central Bank President Mario
Draghi said. MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.22% and its emerging markets index .MSCIEF lost 0.60%.
U.S. stocks barely budged, with gains in shares of Apple Inc
AAPL.O offset by mixed economic data that added to caution
over the prolonged U.S.-China trade war.
Apple Inc AAPL.O rose 0.46% after U.S. trade regulators
approved 10 out of 15 requests for tariff exemptions by the
iPhone maker. U.S. employment in the services sector shrank in September
for the first time in 9-1/2 years, IHS Markit's PMI showed. At
50.9 it was below expectations of 51.3. But data also showed
manufacturing activity rose, topping expectations. The Dow Jones Industrial Average .DJI rose 14.92 points,
or 0.06%, to 26,949.99. The S&P 500 .SPX lost 0.29 points, or
0.01%, to 2,991.78 and the Nasdaq Composite .IXIC dropped 5.21
points, or 0.06%, to 8,112.46.
The dollar climbed, buoyant in recent months as its
relatively high yield and a strong U.S. economy attracted
investors.
The dollar index .DXY rose 0.11%, with the euro EUR=
fell 0.23% to $1.0992. The Japanese yen JPY= strengthened
0.12% versus the greenback at 107.46 per dollar.
Bond yields across the euro area tumbled after the weak
business activity data. The yield on Germany's benchmark 10-year
bond DE10YT=RR fell to negative 0.59%, its lowest since the
ECB meeting on Sept. 12 concluded with rate cuts and fresh asset
purchases to boost weak growth.
U.S. Treasury yields dropped in line with the European bond
market. U.S. 30-year, 10-year and 2-year yields all fell to
two-week lows.
The benchmark 10-year U.S. Treasury notes US10YT=RR rose
10/32 in price to push its yield down to 1.718%.
Crude oil futures stabilized after nearly a 7% gain last
week. Concerns about global supplies following the Sept. 14
attack on Saudi oil facilities offset prospects for quick
restoration of the kingdom's output and worries about a weak
European economy.
Global benchmark Brent futures LCOc1 settled up 49 cents
to $64.77 a barrel while U.S. West Texas Intermediate (WTI)
crude CLc1 rose 55 cents to settle at $58.64.
Worries about Europe helped lift gold to its highest in more
than two weeks. U.S. gold futures GCcv1 settled up 1.1% at
$1,531.50 an ounce.