By Chuck Mikolajczak
NEW YORK (Reuters) - Global equities were lower on Monday, pressured by another downdraft in oil prices and worries over growth in China's economy, while the holiday season kept trading volumes muted.
Prices of both Brent and U.S. crude dropped more than 3 percent (LCOc1) (CLc1), reversing a brief rebound and dragging U.S. energy shares (.SPNY) down 1.8 percent as the worst performing of the major S&P sectors.
Crude again moved within sight of an 11-year low. Brent settled at $36.62 and U.S. crude settled at $36.81 as last week's short-covering dried up and players worried that prices had more room to swoon.
"You have energy and tax-loss harvesting moving markets back and forth in these last few weeks,” said Tim Courtney, Chief Investment Officer at Exencial Wealth Advisors, which oversees $1.4 billion in assets.
In contrast to oil, U.S. natural gas prices (NGc1) settled up 10 percent at $2.228 per million British thermal units as forecasts for colder temperatures led to bets that long-delayed winter weather was finally arriving.
The Dow Jones industrial average (.DJI) fell 23.9 points, or 0.14 percent, to 17,528.27, the S&P 500 (.SPX) lost 4.45 points, or 0.22 percent, to 2,056.54 and the Nasdaq Composite (.IXIC) dropped 7.51 points, or 0.15 percent, to 5,040.99.
A weak batch of industrial profits raised concerns about China's economy and sent Chinese stocks lower by almost 3 percent, their biggest drop in a month.
Profits at Chinese industrial companies in November fell 1.4 percent from a year earlier, the sixth consecutive month of decline and another sign that the world's chief engine of growth for the past decade is sputtering.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> gave up early modest gains to fall 0.53, putting it on track for a 12-percent loss this year.
With trading light in the United States and Europe between Christmas and the upcoming New Year's holidays, as well as a holiday on Monday in the United Kingdom, markets could see exaggerated moves this week.
MSCI's all-country world index <.MIWD00000PUS> lost 0.22 percent, while the pan-European FTSEurofirst 300 (.FTEU3) index closed down 0.54 percent.
In Europe, the drop in oil prices put pressure on energy stocks such as Repsol (REP.MC) and Total (TOTF.PA).
Yields on benchmark 10-year Treasury notes
The dollar edged lower against a basket of major currencies, off 0.03 percent at 97.951 (.DXY) as bullish bets on the currency this year on a U.S. Federal Reserve rate hike met year-end profit-taking.
But the drop in oil prices hurt currencies linked to the commodity, such as the Australian (AUD=) and Canadian dollars (CAD=).
The Australian dollar fell 0.1 percent to $0.7248 while its Canadian counterpart fell 0.6 percent to $1.3902, heading back towards this month's 11-year lows.
Spot gold (XAU=) was down 0.7 percent at $1,068.19 an ounce and was on track for its sixth straight quarterly decline, its longest run of quarterly losses since the mid-1970s.
(Additional reporting by Noel Randewich; Editing by Nick Zieminski)