World equity markets slipped on Monday after economic data raised expectations of a recession in Europe and global growth driver China signalled a slower economic pace ahead, while oil fell as supply worries driven by tensions over Iran offset the economic gloom.
Profit-taking on the dollar drove up the euro after it hit near two-week lows, ahead of Thursday's deadline for Greece to complete a bond swap with private creditors as part of a deal to secure a 130 billion euro (108 billion pounds) bailout and avoid a messy default.
Wall Street stocks followed declines in European and Asian stock markets, and a measure of equities' performance in emerging markets fell more than 1.0 percent.
Investors shrugged off data showing the massive U.S. services sector expanded in February at its fastest pace in a year. The Institute for Supply Management said its services index rose to 57.3 from 56.8 in January, besting economists' expectations of a drop to 56.1.
With China reducing the expected growth rate, the concern is there is the possibility of a bigger downside, said Kate Warne, investment strategist at Edward Jones in St. Louis.
The Dow Jones industrial average <.DJI> closed down 14.76 points, or 0.11 percent, at 12,962.81. The Standard & Poor's 500 Index <.SPX> fell 5.30 points, or 0.39 percent, at 1,364.33. The Nasdaq Composite Index <.IXIC> slid 25.71 points, or 0.86 percent, at 2,950.48.
The FTSEurofirst 300 <.FTEU3> index of top European shares fell 0.6 percent to close at 1,080.54.
Basic resources stocks <.SXPP> in Europe were the top decliners, shedding 3.5 percent after China, the world's largest consumer of raw materials, cut its annual growth target to an eight-year low.
Similarly in New York, materials shares were the biggest drags. The S&P materials sector index <.GSPM> fell 1.6 percent, with aluminium producer Alcoa Inc
MSCI's all-country world equity index <.MIWD00000PUS> fell 0.6 percent to 329.76. Its emerging market index <.MSCIEF> slid 1.4 percent to 1,065.03.
A downward revision to euro zone surveys of purchasing managers' assessments for February wiped out much of the positive effects of last week's European Central Bank injection of three-year funding to the banks.
The euro edged back from a two-week low on profit-taking in the dollar.
European data this morning was negative for the euro, but a lot of investors are quite short the euro, so we are starting to see some capitulation and selling on those positions, said Charles St-Arnaud, foreign exchange strategist at Nomura Securities in New York.
I would not read too much into the euro's bounce as there are plenty of headwinds this week, he said.
The euro was slightly higher, up about 0.2 percent to $1.3218, after earlier falling to near a two-week low around $1.3172.
Brent crude oil rebounded a tad after retreating from early highs to fall below $124 a barrel on the prospect of slower global demand after China cut its growth target and Iraq said it had raised its oil production to a 30-year high.
The potential for supply disruptions due to Iran's row with the West over Tehran's nuclear ambitions continued to bolster oil prices as U.S. President Barack Obama met Israeli Prime Minister Benjamin Netanyahu in Washington, hoping to convince Israel to give sanctions against Iran more time.
The geopolitical risk factor is putting a floor under (the price), said Michael Hewson, senior market analyst at CMC.
Brent crude oil futures for April settled up 15 cents at $123.80 a barrel. In New York, April crude settled up 2 cents at $106.72 a barrel.
U.S. Treasury debt prices eased as recent evidence the U.S. economic recovery is picking up steam undermined the safe-haven value of government debt.
Losses were limited, however, and yields remained well within recent ranges as the poor euro zone data and concerns about Greece's debt swap, along with China's reduced growth target, supported demand for lower-risk assets.
Benchmark 10-year Treasury notes were trading 8/32 lower in price to yield 2.01 percent.
Spot gold prices fell $6.83 to $1,705.00 an ounce.
U.S. gold futures for April delivery settled down $5.90 an ounce at $1,703.90.
(Additional reporting by Julie Haviv, Daniel Bases, Steven C. Johnson, Robert Gibbons and Chuck Mikolajczak in New York; Richard Hubbard in London; Editing by Dan Grebler)