NEW YORK (Reuters) - U.S. shares slipped on Monday on weakness in healthcare and consumer stocks, while a drop in European telecommunications shares kept stocks subdued in the region and oil prices eased from multi-month highs on doubts over the effectiveness of an OPEC deal to cut output.
Pfizer dragged down the S&P 500 healthcare index, while the consumer staples sector fell with losses in Procter & Gamble and PepsiCo weighing.
"Consumer staples have done tremendously well this year," said Richard Sichel, chief investment officer at Philadelphia Trust Co. "On a price-to-earnings basis, they're not looking cheap."
The European telecoms sector dropped on weakness in British phone group BT Group's shares after the Financial Times reported that talks with UK phone regulator Ofcom over a deal to transform BT's fixed-line network Openreach into a legally separate entity have reached a dead end. [.EU]
Investors were also on the lookout for news from Deutsche Bank, which is working to reach a settlement with U.S. authorities who have demanded a fine of up to $14 billion for mis-selling mortgage-backed securities. Its U.S.-listed shares were last down 1.9 percent.
Benchmark Brent crude oil prices steadied after touching a six-week high of $50.90 a barrel, while U.S. crude prices eased after touching a three-month high of $48.87 a barrel. Doubts that OPEC's deal would wipe out a crude glut weighed on prices.[O/R]
MSCI's world equity index fell 0.31 points, or 0.07 percent, to 418.12.
The Dow Jones industrial average was down 64.85 points, or 0.35 percent, at 18,243.3. The S&P 500 was down 7.9 points, or 0.36 percent, at 2,160.37. The Nasdaq Composite was down 12.36 points, or 0.23 percent, at 5,299.64.
Europe's broad FTSEurofirst 300 index slipped 0.05 percent at 1,349.93.
Brent crude was last up 8 cents, or 0.16 percent, at $50.27 a barrel. U.S. crude was last down 1 cent, or 0.02 percent, at $48.23 per barrel.
Sterling fell around 1 percent against the dollar to a three-month low of $1.2818 and slightly above a 31-year low of $1.2796 after Britain on Sunday set a March deadline to start the process to leave the European Union. It also hit a three-year low against the euro of 87.47 pence per euro.
The dollar index, which measures the greenback against a basket of six major currencies, gained on data showing the U.S. manufacturing sector grew by more than expected in September. The index was last up 0.29 percent.
The manufacturing data boosted expectations that the Federal Reserve would raise interest rates by December, sending U.S. Treasury yields higher. Traders also awaited Friday's U.S. September jobs report.
Benchmark 10-year U.S. Treasury yields hit a more than one-week high of 1.6260 percent, while two-year yields hit a 12-day high of 0.7980 percent.
"If the week stays like this then December might get more priced in," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.
Spot gold prices fell $4.20, or 0.32 percent, to $1,311.60 an ounce.
Additional reporting by Richard Leong and Karen Brettell in New York; Editing by Meredith Mazzilli