  We present XMM-Newton observations of the radio galaxy 3C 120. The hard X-ray
spectrum contains a marginally resolved Fe I K-alpha emission line with
FWHM=9,000 km/s and an equivalent width of 57 eV. The line arises via
fluorescence in a broad-line region with covering fraction of 0.4. There is no
evidence of relativistically broad Fe K-alpha, contrary to some previous
reports. The normal equivalent widths of the X-ray and optical emission lines
exclude a strongly beamed synchrotron component to the hard X-ray and optical
continua. There is an excess of 0.3-2 keV soft X-ray continuum over an
extrapolation of the hard X-ray power-law, which may arise in a disk corona.
Analysis of an archival Chandra image shows that extended emission from the jet
and other sources contributes <3% of the total X-ray flux. A break in the X-ray
spectrum below 0.6 keV indicates an excess neutral hydrogen column density of
N_H=1.57 * 10^21 cm^{-2}. However, the neutral absorber must have an oxygen
abundance of <1/50 of the solar value to explain the absence of an intrinsic or
intervening O I edge. There is no ionized absorption in the soft X-ray
spectrum, but there is a weak, narrow O VIII Ly-alpha emission line. We do not
detect previously claimed O VIII absorption from the intervening intergalactic
medium. Radio observations at 37 GHz show a fast, high frequency flare starting
8 days after the XMM-Newton observation. However, this has no obvious effect on
the X-ray spectrum. The X-ray spectrum, including the soft excess, became
harder as the X-ray flux decreased, with an estimated pivot energy of 40 keV.
The UV and soft X-ray fluxes are strongly correlated over the 120 ks duration
of the XMM-Newton observation. This is qualitatively consistent with
Comptonization of UV photons by a hot corona. (Abridged)
