US stocks edge lower, oil gains

New York - US stocks edged lower early on Tuesday, and oil prices regained ground, fanning worries about their effect on economic growth.

World equities, measured by the MSCI All-Country World Index, were lower, falling 0.1%. It ended February up 2.8%.

The US dollar fell to fresh 3 1/2-month lows against major currencies, while the 10-year US Treasury note also was lower.

U.S. stocks, which are up about 26% since the start of September, slipped even as data showed US factory growth rose in February.

"If gas prices go higher that will put a damper on things," said Douglas Lane, president of the New York-based Douglas C. Lane & Associates, which has about $2.2bn in assets under management.

"The market has been on a big upswing and there will be a correction at some point. Maybe the oil crisis will be a reason for that."

The Dow Jones industrial average was down 22.25 points, or 0.18%, at 12 204.09. The Standard & Poor's 500 Index was down 3.65 points, or 0.28%, at 1 323.57. The Nasdaq Composite Index was down 9.38 points, or 0.34%, at 2 772.89.

US crude for delivery in April rose $1.68 to $98.65 a barrel, while Brent crude was up $2.37 at near $114.18 on continued concerns about supply disruptions amid unrest in Libya.

Crude was still off its highs of last week, when Brent crude traded close to $120 per barrel, its highest in more than two years, due to concerns that political upheaval in Libya would spread across oil-producing nations in the Middle East. Saudi Arabia has calmed the market with extra supply.

The upheaval in the Middle East and North Africa helped spot gold to rise. Gold staged its largest monthly rise in February since last August, as turmoil in the Middle East fed investor demand for perceived safe-haven assets.

Helping to support the view that monetary tightening was beginning to register, data out of China showed manufacturing growth slowed in February while costs jumped. Analysts said more tightening would probably be needed to cool inflation due largely to rising oil and food prices.

In Europe, the FTSEurofirst 300 index of leading European shares was down 0.1% at 1 167.88.

The dollar index, which tracks its performance against a basket of major currencies, was down 0.1%. It hit a 3-1/2 month low of 76.735, before recovering slightly to 76.802.