April 18, 2019 / 3:36 PM / 10 months ago

GLOBAL MARKETS-Stocks erase weekly gains on lackluster manufacturing data

* Continued weakness in healthcare drags on Wall Street

* Euro hits over 1-week low

* Weak PMI data pushes down U.S. Treasury yields

* Strong U.S. retail sales boost dollar (Updates to open of U.S. markets)

By April Joyner

NEW YORK, April 18 (Reuters) - A gauge of global stocks erased this week's gains on Thursday after underwhelming manufacturing surveys from Asia and Europe and continued weakness in U.S. healthcare shares spurred profit-taking ahead of an extended Easter holiday weekend.

The MSCI All-Country World Index fell 0.3% to wipe out its advance earlier in the week, though it still traded near six-month highs.

On Wall Street, a sell-off in healthcare shares, which have been under pressure from Democratic proposals to extend Medicare coverage to more Americans, overshadowed strong March retail sales data showing the greatest increase in 1-1/2 years.

Lackluster French and German surveys of purchasing managers in the manufacturing sector for April, which showed activity continuing to contract, also prompted selling among some investors, said Darrell Cronk, chief investment officer for wealth and investment management at Wells Fargo in New York.

Activity in Germany's services sector rose to a seven-month high in April, but investors focused on the 44.5 reading for the manufacturing sector, well below the 50.0 mark separating growth from contraction even if it was above the 44.1 reading last month.

The weak surveys out of Europe added to a reading of Japanese manufacturing activity which showed new export orders fell at the fastest pace in almost three years.

"The euro zone PMIs showed a lackluster start to the second quarter," Cronk said. "There's a little bit of profit-taking here."

The release of Special Counsel Robert Mueller's report on Russia's role in the 2016 U.S. election had little impact on Wall Street.

"It's probably the news story of the day, but there's probably no epiphanies or surprises that the market hadn't anticipated," Cronk said.

The Dow Jones Industrial Average rose 47.44 points, or 0.18%, to 26,496.98, the S&P 500 lost 3.83 points, or 0.13%, to 2,896.62 and the Nasdaq Composite dropped 24.60 points, or 0.31%, to 7,971.48.

The underwhelming French and German manufacturing survey data also hit European stocks in early trade, but short-covering helped Germany's DAX trade 0.5% higher, and the pan-European STOXX 600 index rose 0.2%.

The euro fell to its lowest in more than a week after the data, and was down 0.5% on the day at $1.1241.

Conversely, the dollar index, which measures the greenback against a basket of six major currencies, rose 0.4% on the strength of U.S. retail sales data.

The euro zone manufacturing data had more sway over U.S. Treasury yields, however. Benchmark 10-year notes last rose 9/32 in price to yield 2.5614%, from 2.592% late on Wednesday.

"The (U.S.) retail sales report was great, but they seem to be focused on the fact that the data are struggling out of Europe," said Mary Anne Hurley, vice president of fixed income trading at D.A. Davidson in Seattle, referring to investors.

In oil markets, Brent crude futures rose 4 cents to $71.66 a barrel, a 0.1% gain. U.S. West Texas Intermediate (WTI) crude futures fell 15 cents to $63.61 a barrel, a 0.2% loss. (Reporting by April Joyner; Additional reporting by Richard Leong, Karen Brettell, Gertrude Chavez-Dreyfuss and Stephanie Kelly in New York, Ritvik Carvalho and Abhinav Ramnarayan in London and Shinichi Saoshiro in Tokyo; Editing by Bernadette Baum)

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