(Updates with new quote)
* Base metals prices fall again as dollar gains
* Pfizer set to buy Allergan (N:AGN_pa)
* Commodities index hits 13-year low before recovering
By Caroline Valetkevitch
NEW YORK, Nov 23 (Reuters) - The dollar rose to an eight-month high on Monday amid heightened expectations that the U.S. Federal Reserve might raise interest rates next month, driving down the prices of copper, gold and other metals.
World equity markets slipped, with U.S. stocks ending slightly lower in quiet trading after strong gains last week.
Worries that a buoyant dollar could discourage producers from cutting supply despite weak demand weighed on base metals prices. Copper fell to its cheapest in six months before recovering. urn:newsml:reuters.com:*:nL8N13I28S urn:newsml:reuters.com:*:nL3N13I2F4
The dollar index .DXY , which measures the greenback against six major currencies, rose as much as 0.4 percent, touching 100.000, an eight-month high not far from this year's peak of 100.390.
San Francisco Fed President John Williams on Saturday cited a "strong case" for raising rates when Fed policymakers meet next month, as long as U.S. economic data does not disappoint. urn:newsml:reuters.com:*:nL1N13G0MI His comments overshadowed Monday's lackluster U.S. manufacturing and housing reports.
"For him to acknowledge that there's a strong case for higher rates next month is a strong signal to the market that there's increasing consensus at the Fed that rates are likely to rise next month," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
A big healthcare deal failed to impress U.S. stock investors. Pfizer's PFE.N announcement of what is expected to be the biggest-ever healthcare deal pushed its shares down 2.6 percent, making it one of the biggest drags on the S&P. Target company Allergan AGN.N closed 3.4 percent lower after the $160 billion deal announcement. urn:newsml:reuters.com:*:nL3N13I2Z3
The Dow Jones industrial average .DJI fell 31.13 points, or 0.17 percent, to 17,792.68, the S&P 500 .SPX lost 2.58 points, or 0.12 percent, to 2,086.59 and the Nasdaq Composite .IXIC dropped 2.44 points, or 0.05 percent, to 5,102.48.
"We had a very large rally last week, and it's not surprising to see the market correct after that," said Stephen Massocca, Chief Investment Officer of Wedbush Equity Management LLC in San Francisco.
The MSCI index of global stock markets .MIWD00000PUS fell 0.3 percent, and a broad gauge of European stocks .FTEU3 ended down 0.3 percent, pressured by commodity-related losses.
Three-month copper CMCU3 in London hit a low of $4,443.50 a tonne before recovering to end at $4,490, down 2 percent. LME nickel CMNI3 fell as far as $8,175 before ending down 5 percent at $8,300. urn:newsml:reuters.com:*:nL8N13I28S Spot gold XAU= was down 0.9 percent at $1,068 an ounce. Silver hit its lowest level in more than six years.
The Thomson Reuters Core Commodity CRB index .TRJCRB hit its lowest since November 2002 before bouncing back. It was last down 0.2 percent. urn:newsml:reuters.com:*:nL8N13I41W
Crude oil prices ended mixed. Supply worries offset Saudi Arabia's pledge to work on price stability. Brent futures LCOc1 settled up 17 cents at $44.83 a barrel, while U.S. crude CLc1 finished down 15 cents at $41.75.
U.S. Treasuries prices rose as a solid two-year note auction renewed demand for longer-dated bonds. Benchmark 10-year notes US10YT=RR were up 4/32 in price to yield 2.246 percent, down nearly 2 basis points.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets in 2015
http://link.reuters.com/dub25t Currencies vs dollar
http://link.reuters.com/tak27s Commodities performance
http://link.reuters.com/rac73w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>