Global stocks fall on weak data, air strikes in Syria

By Herbert Lash NEW YORK (Reuters) - More downbeat data from Europe pushed global equity markets to a third day of losses on Tuesday, while U.S. air strikes in Syria set a cautionary tone and lifted prices of safe-haven bonds. President Barack Obama vowed to continue the fight against Islamic State fighters following the first U.S.-led air strikes targeting the militant group in Syria. The strikes drove safe-haven bids on concerns that the conflict could intensify. "We're starting to see a little bit of safe-haven buying come back into the market," said David Coard, head of fixed income sales and trading at Williams Capital Group in New York. The benchmark 10-year Treasury bond rose 8/32 in price to yield 2.5347 percent. German 10-year Bund yields, the benchmark for euro zone borrowing costs, fell 1 basis point to 1.01 percent. Stocks on Wall Street eased, following downward pressure in Europe after data showed euro zone business activity expanded at a slightly weaker pace in September than expected. Firms cut prices for a 30th consecutive month to boost sales. Shares of a dozen companies on both sides of the Atlantic fell, wiping out a total of $13 billion of stock market value, after the U.S. Treasury took steps to curb "inversion" deals aimed at escaping high U.S. taxes by reincorporating abroad. The manufacturing PMI for Germany slumped to its lowest since June 2013, below forecasts in a Reuters poll. A services industry PMI for the bloc's No. 2 economy, France, faltered after just two months in growth territory. Markets shrugged off data showing U.S. manufacturing activity held near a 4-1/2 year high this month. MSCI's all-country world index fell 0.57 percent to 422.15, while the FTSEurofirst 300 index of top European shares closed down 1.34 percent at 1,374.85. The Dow Jones industrial average fell 100.66 points, or 0.59 percent, to 17,072.02. The S&P 500 slid 9.21 points, or 0.46 percent, to 1,985.08 and the Nasdaq Composite lost 13.30 points, or 0.29 percent, to 4,514.39. Despite a downbeat tone in markets, the prospect that stocks continue to rally appears the likely course, said Andrew Wilkinson, chief market analyst at Interactive Brokers Group in Greenwich, Connecticut. "The underpinnings of the global stock market rally remain intact, so there's not a lot of catalyst for change," Wilkinson said. He cited the Federal Reserve's low interest rate pledge last week, rising albeit tepid global growth and earnings that justify current market valuations. The dollar rebounded against both the euro and Japanese yen, trading near break-even. The euro rose 0.08 percent to $1.2859, while the yen traded flat at 108.84. The dollar index slipped 0.12 percent at 84.650. Brent crude oil inched lower as ample global supplies outweighed tensions in the Middle East, while U.S. oil bounced higher after four sessions of losses. Brent for November delivery settled down 12 cents at $96.85 a barrel. U.S. crude rose 69 cents to settle at $91.56 a barrel. (Reporting by Herbert Lash; Additional reporting by Marc Jones in London; Editing by Dan Grebler and Chizu Nomiyama)