* U.S. June retail sales data disappoint
* "Empire State" factory index rises in July
* Brazil Bovespa falls 1.52 pct, Mexico IPC up 0.29 pct
By Asher Levine and Rachel Uranga
SAO PAULO/MEXICO CITY, July 16 (Reuters) - Latin American stocks were mixed o n M onday after data showing an unexpected fall in U.S. retail sales contributed to a sell-off in Brazil's Bovespa, while better-than-expected manufacturing data from New York State supported Mexico's bourse.
The MSCI Latin American stock index slipped 0.54 percent to 3,512.34.
Steel makers and commodities producers dragged Brazil's benchmark Bovespa index down to its biggest loss in four sessions, while lender Grupo Financiero Banorte led gains in Mexico's IPC index.
U.S. retail sales fell for a third straight month in June, the Commerce Department said o n M onday. Along with recent data showing a slowdown in job growth and weakening industry, the data added to concerns that the U.S. economic recovery is slowing.
Worries over the pace of global economic growth tend to drive investors away from riskier assets such as Latin American equities in favor of safe-haven investments like the U.S. dollar.
"Today the U.S. numbers are weighing most on the market, even though the losses in markets abroad weren't so sharp," said Douglas Pinto, a broker with BGC Liquidez in Sao Paulo.
"Any type of news that impacts markets, here it hits shares more. It's become an investment strategy, in fact. Everything falls sharply, but then everyone comes right back in again."
Brazil's Bovespa index slipped 1.52 percent to 53,503.32. The index has fluctuated for the past two months between highs near 57,000 points and lows near 52,500.
"Investors know the market is volatile. Whatever little piece of news, whatever sneeze, people can't ignore it," Pinto said. He added that the scenario will likely continue through the end of the year, "or at least until we see better growth numbers in industry and more sustainable growth in the economy."
Shares of OGX, the oil company controlled by Brazilian billionaire Eike Batista, fell nearly 5 percent, weighing most heavily on the index, after analysts at Deutsche Bank Securities cut their price target and recommendation on the stock.
Shares of credit card payment processor Cielo rose 0.79 percent, while those at smaller rival Redecard were unchanged. Analysts surveyed by Reuters said slowing transaction volumes, falling prices and higher expenses during the second half may weigh on the sector's shares.
Mexico's IPC index gained for a sixth straight day, rising 0.29 percent to 40,616.76, a record high. A technical indicator known as the relative strength index crossed into "overbought" territory, however, indicating stocks may be due to fall in coming sessions.
Gains in the index were led by Grupo Financiero Banorte , which rose 2.17 percent after JP Morgan analysts raised their price target on the shares to 79 pesos from 66.
Mexican shares were also supported by data showing manufacturing in New York state perked up in July after a sharp drop the month before.
"Obviously (U.S. retail sales data) was a negative surprise for the market," said Luis Rodriguez, an analyst at Finamex in Guadalajara, Mexico.
"On the other hand, New York manufacturing came out positive and that also affects Mexico," he added, highlighting the close links between the U.S. and Mexican manufacturing sectors.
Chile's IPSA index posted its biggest daily gain in nearly two weeks, rising 0.39 percent to 4,372.67.
Regional energy group Endesa Chile added 1.14 percent, contributing most to the index's rise, while Banco de Chile climbed 1.32 percent.
Latin America's key stock indexes at 15:36 GMT: Stock indexes daily % YTD %
Latest change change MSCI LatAm 3,512.34 -0.54 -1.97
Brazil Bovespa 53,503.32 -1.52 -5.73
Mexico IPC 40,616.76 0.29 9.55
Chile IPSA 4,372.67 0.39 4.67
Chile IGPA 20,984.84 0.37 4.25
Argentina MerVal 2,375.13 -0.26 -3.55
Colombia IGBC 13,595.91 -0.50 7.34
Peru IGRA 20,122.72 0.08 3.33
Venezuela IBC 249,226.94 0 112.95
(Editing by Dan Grebler)