* U.S. rates path points to summer hike
* Brent oil falls for 4th straight session
* Monsanto (NYSE:MON) shares up after Bayer unveils bid
(Adds U.S. market closing levels)
By Caroline Valetkevitch and Saqib Iqbal Ahmed
NEW YORK, May 23 (Reuters) - Global stock markets edged
lower while short-dated U.S. Treasury yields held near two-month
highs on Monday as investors weighed the possibility that U.S.
interest rates could soon rise.
Commodities were mostly lower. Oil prices fell for a fourth
session in a row as investors worried about global supply, while
gold declined to a 3-1/2-week low.
In the United States, an imminent rise in interest rates was
looking more probable. The Federal Reserve will likely tighten
policy a bit more quickly in 2017 than this year, by perhaps one
or two more rate hikes, San Francisco Fed President John
Williams said on Monday.
St. Louis Fed President James Bullard said a relatively
tight labor market in the United States may put upward pressure
on inflation, boosting the case for higher interest rates.
The Fed surprised investors when the central bank's meeting
minutes released last week opened the door to a rate hike as
early as in June.
Topping the agenda this week is whether U.S. economic data
adds to the likelihood of a June or July rate increase.
MSCI's all-country world stock index .MIWD00000PUS was
down 0.2 percent while U.S. stocks also ended slightly lower.
"The market needs to be coddled and gently eased into a
slightly higher interest-rate environment, and that appears to
be what the Fed is doing," said Tim Ghriskey, chief investment
officer of Solaris Group in Bedford Hills, New York.
"Rates need to normalize, and the Fed needs to give itself
room to lower again in the event of another financial crisis,"
Ghriskey said.
The Dow Jones industrial average .DJI closed down 8.01
points, or 0.05 percent, at 17,492.93, the S&P 500 .SPX lost
4.28 points, or 0.21 percent, to 2,048.04 and the Nasdaq
Composite .IXIC dropped 3.78 points, or 0.08 percent, to
4,765.78.
The pan-European FTSEurofirst 300 index .FTEU3 of leading
regional stocks ended down 0.5 percent.
Shares of Monsanto MON.N closed up 4.4 percent at $106
after Bayer unveiled a $62 billion bid for U.S. seeds company
Monsanto. Bayer AG BAYGn.DE fell 5.7 percent
during the European session.
Short-dated U.S. Treasury yields edged up, with the two-year
yield hovering at its highest in two months on Fed rate-hike
bets.
The two-year Treasury yield US2YT=RR hit 0.905 percent,
nearing the two-month peak of 0.920 percent set last Thursday,
while benchmark 10-year Treasury notes US10YT=RR were up 4/32
in price with a yield of 1.835 percent, down 1 basis point from
Friday.
Investors also digested economic data that showed euro zone
private-sector growth in manufacturing and services slowing a
little in May, even though Germany continued to power ahead.
In currency markets, the U.S. dollar tumbled nearly 1
percent against the yen on Japanese trade data and U.S.
resistance to currency intervention by Tokyo.
The dollar was last down 0.9 percent at 109.19 yen JPY= ,
while the dollar index .DXY , which measures the greenback
against a basket of six major rivals, was last down 0.12 percent
at 95.223.
Oil prices slid after Iran vowed to ramp up output and as a
slump in the number of rigs drilling for crude in the United
States stalled. Brent's front-month LCOc1 fell 37
cents to settle at $48.35 in a fourth straight day of losses,
matching a similar streak in mid-April, while U.S. crude CLc1
fell 33 cents to $48.08 a barrel.
In the metals market, Gold dipped to a 3-1/2-week low on the
Fed rate hike expectations, but prices came off their lows as
late-day short-covering entered the market. Spot gold XAU= was
down 0.1 percent at $1,250.96 an ounce after falling earlier to
$1,242.63 an ounce, the lowest since April 28.
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Shanghai CSI 300 and global effects interactive https://t.co/YqIYLIbInP
Chinese A-shares vs developed and emerging stocks http://link.reuters.com/rac25w
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