US manufacturing drop pulls stocks down

Blue chip industrials on Wall Street fell but the wider market was more resilient to new concerns about economic growth.

US factory activity fell more than expected in June, offset by increased spending on construction projects in May that reached its highest level in nearly 2½ years.

At the close, the Dow Jones Industrial Average was down 8.07 points, or 0.1%, to 12,871.39.

The S&P 500 index lifted out of the red to post a 0.3% gain to 1365.51, while the Nasdaq Composite advanced 0.6% to 2951.23.

Other markets: Europe up, Asia mixed
European stocks posted solid gains after last week's summit meeting of European Union leaders produced more progress than expected toward shoring up the eurozone banking sector.

Spanish stocks saw their biggest one-day rise since May 2010 after EU leaders agreed to allow rescue funds to directly recapitalise ailing banks. The IBEX 35 index advanced 0.3% to 7124.

The Stoxx 600 Europe index closed 1.5% higher at 254.82, extending Friday's big rally when shares posted their biggest one-day rally of 2012.

Germany's DAX 30 index rose 1.2% to close at 6496.08, France's CAC 40 index gained 1.4% to 3240.20 and London's FTSE 100 stock index gained 1.2% to 5640.64.

Asian markets ended mixed as data showed a regional slowdown in manufacturing, offsetting a recovery in mining stocks.

The focus was on China, where two sets of data suggested a slowdown in manufacturing.

The Shanghai Composite dipped at the start but managed to regain ground and finish flat at 2226.11. Hong Kong was closed for a public holiday.

Korea's Kospi ended down 0.1% at 1851.65, after its June data indicated a contraction in manufacturing.

Japan's Nikkei Average was flat at 9003.48 andAustralia’s S&P/ASX 200 was up 0.9% at 4133.00.

Commodities: Oil up, gold down
Crude-oil futures were lower after weak Chinese manufacturing data and news of the sale of a large East Coast US refinery. On Friday, futures surged in a near-historic jump of more than 9%.

Front-month crude futures were down $US1.39, or 1.6%, at $US83.57 a barrel in New York.

Gold futures eased as investors weighed the EU's latest crisis-fighting plan.

The most actively traded gold contract, for August delivery, fell $US6.50, or 0.4%, to settle at $US1597.70 an ounce in New York.

Currencies: US dollar rises
The US dollar rose more against the euro, pushing it under $US1.26.

The euro lost ground earlier after Finland reportedly signalled it would block efforts to use the eurozone's permanent rescue fund to buy distressed government debt.

The euro was $1.2578, down from $1.2661 late on Friday.

The dollar was at ¥79.42 compared with ¥79.81, while the euro was at ¥99.901 compared with ¥101.

The pound traded at $US1.5684 from $US1.5704, while the dollar bought 0.9551 Swiss franc from 0.9487 franc.