🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

GLOBAL MARKETS-Commodities, stocks fall on US data, China

Published 05/04/2011, 10:53 AM
Updated 05/05/2011, 03:56 PM
NDX
-
DJI
-
DANSKE
-
HG
-
CL
-
FTNMX551030
-

* US stocks open lower on jobs, non-manufacturing data

* Copper falls to 7-week low on concerns about China

* Euro at 17-month high against dollar, up 0.6 pct (Updates with U.S. markets open)

By Walter Brandimarte

NEW YORK, May 4 (Reuters) - Commodity prices fell on Wednesday, driving world stocks lower, as disappointing U.S. economic data and concerns about the slowdown of the Chinese economy prompted investors to scale back risky positions.

U.S. stocks and the dollar were further pressured by a report showing private employers added fewer jobs than expected in April and by a surprise slowdown of the U.S. services sector last month.

The dollar hit a session low against the euro as investors interpreted the data as the latest sign that the Federal Reserve will not withdraw economic stimulus any time soon, while European policymakers keep raising interest rates.

"This appears to be a bump in the road for the recovery if indeed the pace of job recovery has slowed," said Michael Woolfolk, strategist at BNY Mellon. "It certainly feeds into the notion that the Fed won't be hiking interest rates soon."

The U.S. Dollar Index <.DXY>, which measures the greenback against a basket of key currencies, fell more than 0.5 percent to a three-year low after the U.S. data.

The euro last traded at $1.4920 , up 0.6 percent, having risen as high as $1.4939, a 17-month high, according to Reuters data.

Concerns about the global economic recovery were on the rise as investors worried about further tightening measures in China, the world's top consumer of commodities.

Copper prices dropped to a seven-week low, with three-month contracts on the London Metal Exchange hitting a session low of $9,135 per tonne, the lowest since March 15, compared with $9,350 at the close on Tuesday.

"General risk appetite is under pressure at the moment. There are some fears over China -- will they tighten too much?" said Arne Lohmann Rasmussen, an analyst with Danske bank.

On Wall Street, disappointment with the economic data outweighed encouraging news of mergers and acquisitions.

The Dow Jones industrial average <.DJI> was down 117.61 points, or 0.92 percent, at 12,689.90. The Standard & Poor's 500 Index <.SPX> was down 12.57 points, or 0.93 percent, at 1,344.05. The Nasdaq Composite Index <.IXIC> was down 21.91 points, or 0.77 percent, at 2,819.71.

The MSCI All-Country World index <.MIWD00000PUS> lost 0.8 percent, after hitting its highest level in almost three years last week.

In Europe, the FTSEurofirst 300 index <.FTEU3> fell 1.4 percent, led by weak mining and oil shares. Emerging stocks <.MSCIEF> lost more than 1 percent.

Before this week's decline, world stocks had risen more than 8 percent this year as investors grew confident strong corporate earnings, robust growth in emerging markets and ample liquidity would keep global growth at a reasonable level.

U.S. crude oil was down 1.7 percent to $109.16 a barrel, weighed by concerns over China. Crude is still near a 31-month peak, keeping alive inflation worries.

Portuguese bond yields fell after the country agreed to a three-year 78-billion-euro ($116 billion) bailout with the European Union and IMF on Tuesday, becoming the third euro zone country in a year, after Ireland and Greece, to seek financial aid. [ID:nLDE7420RT] (Additional reporting by Wanfeng Zhou, Ryan Vlastelica in New York and Melanie Burton in London; Editing by Dan Grebler)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.