July 2, 2012 / 2:43 PM / 5 years ago

US STOCKS-Wall St down as data raise global growth concerns

* U.S. manufacturing sector contracts in June-ISM

* Bristol-Myers to buy Amylin for about $5.3 bln

* UBS cuts year-end target on S&P 500

* Indexes down: Dow 0.4 pct, S&P 0.2 pct, Nasdaq 0.1 pct

By Angela Moon

NEW YORK, July 2 (Reuters) - U.S. stocks edged lower on Monday as weak manufacturing data at home and abroad raised concerns about global economic growth.

Last Friday’s rally on Wall Street, boosted by hopes that the euro zone was a step closer to solving its debt crisis, ran out of steam on Monday as the Institute for Supply Management’s June manufacturing index showed the U.S. factory sector suffered its first contraction since July 2009.

Euro zone manufacturing shrank again in June and factories are preparing for worse, according to business surveys showing jobs were cut at the fastest pace in two-and-a-half years. The data showed factories in Germany and France are succumbing to a downturn that started in southern Europe.

Manufacturing in China, the world’s second-biggest economy, also worsened in June with export orders, usually an indicator of global economic health and trade flows, posting their biggest fall since December.

“This is clearly very, very troubling. It indicates that at least in the month of June the manufacturing sector of the (U.S.) economy contracted and there is meaningful evidence of, at a minimum, disinflation,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany.

Separate data showed U.S. construction spending rose to its highest level in nearly 2-1/2 years in May, but market reaction was muted.

Also adding to concerns, UBS cut its year-end target on the S&P 500 index to 1,375, from 1,475. Jonathan Golub, strategist at UBS, cited the following reasons: deterioration in incoming U.S. economic data; the Supreme Court’s healthcare ruling, which is believed to contribute to greater partisanship ahead of year-end fiscal discussions; and a more contentious tone among European policymakers, despite some success at the most recent Euro summit.

The Dow Jones industrial average was down 50.55 points, or 0.39 percent, at 12,829.54. The Standard & Poor’s 500 Index was down 3.16 points, or 0.23 percent, at 1,359.00. The Nasdaq Composite Index was up 1.95 points, or 0.07 percent, at 2,937.00.

Bristol-Myers Squibb Co will buy biotechnology company Amylin Pharmaceuticals Inc for about $5.3 billion in cash, helping Bristol-Myers extend its portfolio of diabetes treatments with the addition of drugs Byetta and Bydureon. Shares of Bristol-Myers added 1 percent to $36.31 and Amylin shares rose 8.9 percent to $30.72.

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