* U.S. stocks slip after weak Morgan Stanley (N:MS) results
* Morgan Stanley profit falls 42 percent in Q3
* Brent crude drops 3 pct, U.S. crude off 2 pct
* Dollar gains ahead of ECB meeting
* China growth data weak but slights beats forecast
(Adds U.S. markets open, byline, dateline; previous LONDON)
By Sam Forgione
NEW YORK, Oct 19 (Reuters) - U.S. markets slipped on Monday
after weak results from Morgan Stanley stoked worries over the
health of the world's biggest banks, while oil prices tumbled on
concerns over tepid demand from China.
European equity markets gave up most of their earlier gains
following the release of Morgan Stanley's results and amid
weakness in commodity stocks, while most Asian markets were
weighed down by poor Chinese growth data.
Morgan Stanley's profit plunged 42 percent MS.N , capping a
generally downbeat quarter for big U.S. banks in recent months,
after investors fled the bond, currency and commodity markets.
Morgan Stanley's shares MS.N fell 6.2 percent, and the stock
was the second-largest drag on the benchmark S&P 500 index.
The results stoked worries over the state of other big world
banks. Among major U.S. banks, only Wells Fargo (N:WFC) & Co WFC.N has
reported a rise in revenue and income from interests on loans in
the third quarter, while Germany's Deutsche Bank DBKGn.DE
reported a record third-quarter loss earlier this month.
"After three weeks of market gains, any disappointing
earnings this morning could indicate that we could be in for
some profit-taking," said Peter Cardillo, chief market economist
at Rockwell Global Capital in New York.
China's economy, the world's second biggest, grew at the
slowest pace in six years in the third quarter, data showed on
Monday, making it increasingly likely that Beijing will cut
interest rates to spur activity.
While monthly Chinese industrial output numbers were poor
and the quarterly growth figure was the weakest since the 2008
financial crisis, the 6.9 percent reading just beat a forecast
for 6.8 percent and suggested official efforts to stimulate the
economy were working.
OIL DROPS
The reaction in the oil market was negative, with Brent
crude down 3 percent and U.S. crude off 2 percent, on concerns
over slowing growth in China, the world's largest energy
consumer.
Data also showed that Chinese oil demand fell slightly in
September, meaning the country's year-to-date growth is running
behind the International Energy Agency's forecast.
The MSCI world equity index .MIWD00000PUS , which tracks 46
key global markets, was last down 0.23 percent, while the
pan-regional FTSEurofirst 300 index .FTEU3 was last up 0.25
percent.
The Dow Jones industrial average .DJI was last down 22.85
points, or 0.13 percent, at 17,193.12. The S&P 500 .SPX was
down 1.92 points, or 0.09 percent, at 2,031.19. The Nasdaq
Composite .IXIC was up 16.68 points, or 0.34 percent, at
4,903.37.
Brent crude LCOc1 was last down $1.33 at $49.13 a barrel,
while U.S. crude CLc1 was last down 81 cents at $46.45 per
barrel.
The euro retreated to a 10-day low against the dollar of
$1.1308 as investors focused on a European Central Bank meeting
later in the week that could pave the way for further stimulus
to boost inflation in the euro zone.
"Any dovish shift in the ECB's language will be seen as
increasing the odds of more stimulus and likely send the euro
broadly lower," said Omer Esiner, chief market analyst, at
Commonwealth Foreign Exchange in Washington.
The dollar index, which measures the greenback against a
basket of six major currencies, was last up 0.41 percent at
94.932 .DXY .
U.S. 30-year Treasury yields US30YT=RR rose to a nearly
one-week high of 2.91 percent, while spot gold prices
were last down 0.53 percent at $1,170.70 an ounce.