Copper and oil slide, world equities dip

NEW YORK - Copper futures dropped on Friday on concerns over Chinese growth and as the US dollar strengthened, while crude oil extended recent losses and a global gauge of equities drifted lower.

Stocks were little changed on Wall Street, with low volume due in part to a snowstorm that blanketed the US Northeast -including financial hubs New York and Boston.

Federal Reserve Chairman Ben Bernanke said the US central bank is committed to highly accommodative policy even after deciding last month to trim its bond-buying stimulus.

European shares rose, bucking a wave of risk aversion that swept across Asia, where stocks slid after a measure of activity in China's services sector slipped in December to a four-month low.

At the closing bell in New York, the Dow Jones industrial average rose 28.64 points, or 0.17 per cent, at 16,469.99. The S&P 500 dipped 0.62 points, or 0.03 per cent, at 1,831.36. The Nasdaq Composite fell 11.16 points, or 0.27 per cent, at 4,131.91.

The benchmark FTSEurofirst 300 index rose 0.5 per cent, and MSCI's index of equities in 45 countries was down 0.16 per cent.

Three-month copper dropped 1.1 per cent to $7,315 (4,456.02 pounds) a tonne in its largest daily drop since December 2.

"Chinese worries are playing into recent commodity weakness," said Jim Russell, senior equities strategist at US Bank Wealth Management. "There is concern on the outlook for 2014, many think it will represent a step down in growth rate in China as compared to recent years."

He said strength in the US dollar was also weighing on parts of the commodities complex, including oil.

Expectations for a rise in Libyan supply and speculation of a buildup in US stockpiles kept pressure on oil prices after they tumbled Thursday. US crude fell for a fourth consecutive day and hit a one-month low, and Brent dipped after posting its largest daily drop since late June.

"The sentiment is still bearish for sure, and I think Libya is still going to be the key driving factor," said Amrita Sen, chief analyst at consultants Energy Aspects.

US crude was recently down 1.4 per cent at $94.15 a barrel, and Brent fell 0.8 per cent to $106.95.

Spot gold rose for a fourth session to hit a two-week high as weaker equities spurred demand for the metal as a safe-haven asset. It was recently up 1 per cent at $1,236.29 per ounce.

US Bank's Russell said that after a 28 per cent drop last year some traders see value in gold, but "we think headwinds remain in place."

GREENBACK HOLDS RECENT GAINS

The yen was little changed near five-year lows against the dollar. The greenback last traded flat against the Japanese currency, at 104.78 yen, with a five-year high of 105.44 yen set Thursday in sight.

The euro, the top-performing major currency of 2013, shed 0.6 per cent against the yen, to 142.38 yen, following Thursday's more than 1 per cent slide.

Against the dollar, the euro lost 0.6 per cent to $1.3591.

"You have a holiday week, which is always going to be pretty light on volume, and with most of the Northeast digging itself out of the snowstorm that has made activity especially light, even for a holiday week," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, D.C.

The greenback added 0.3 per cent against a basket of currencies.

US Treasuries prices ticked down, with benchmark 10-year yields hovering near 3 per cent, with no major economic releases due and investors cautious heading into a busy week that includes the release of December's payrolls report.

The 10-year yield traded in its tightest range in three weeks.

 

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