Recovery doubts take toll on Wall Street

NEW YORK – Commodity prices and crude oil slipped on Monday and global equity markets fell, pulled lower by raw materials-linked stocks, on widespread doubts about the potential strength of the world’s economic recovery.

The yen and the US dollar gained broadly as caution about the global outlook spread across financial markets, leading investors to shun risk and buy currencies perceived to be safe.Euro zone government bonds rose, with Bund futures hitting a seven-week high, lifted by risk aversion and after the Bank of England had to pay above market prices to buy long-dated gilts at its weekly operation. But longer-maturity US Treasury debt prices fell on supply concerns and a stronger-than-expected report on US services industries, which rekindled hopes of an economic rebound later this year.The Institute for Supply Management’s measure of the service sector rose to 47 in June, the highest level since last September and up from 44 in May. However, for investors in equities it was not enough to overcome last week’s much worse-than-expected jobs report.Oil fell more than four per cent at one point to below US$64 a barrel on growing doubts over the strength of an economic rebound.’A lot of people are nervous about the economy and now everybody wants to get out of the exits at the same time,’ said Phil Flynn, an analyst at PFGBest Research in Chicago.’We are seeing this in the stock markets, the gold market and markets for other commodities, including oil. We did get a little bit of support in the latest ISM numbers, but all in all, I feel that demand will be on a downward trend in the next couple of months,’ Flynn added.Before 1 pm, the Dow Jones industrial average was down 20,18 points, or 0,24 per cent, at 8 260,56. The Standard & Poor’s 500 Index was down 5,11 points, or 0,57 per cent, at 891,31. The Nasdaq Composite Index was down 23,43 points, or 1,30 per cent, at 1 773,09.Exxon Mobil Corp down 1,2 per cent and Chevron Corp fell 1,1 per cent to US$62,92, making the two oil companies among the biggest drags on the Dow.Shares of aluminum producer Alcoa Inc slid 7,8 per cent, making it the top drag on the Dow.European equities fell for a third straight session as recovery concerns took their toll on financial, energy and basic resources stocks. The FTSEurofirst 300 index of top European shares closed down 1,1 per cent at 833,03 points,Britain’s top share index, the FTSE 100, fell one per cent to its lowest close in more than two months, with miners the main drag. The DJ Stoxx basic resources index shed 5,2 percent.The dollar’s rise added pressure to commodities denominated in the US currency. The Reuters-Jefferies CRB index, a global commodities benchmark, gave up 1,8 percent. The dollar was up against a basket of major currencies, with the US Dollar Index up 0,25 per cent at 80,583.The euro was down 0,23 per cent at US$1,3929, while against the yen, the dollar was down 0,97 per cent at 95,10.Copper fell more than three per cent to near two-week lows and gold slid more than one per cent as the dollar strengthenedSpot gold was bid at US$923,35 an ounce, while copper for three-months delivery in London was quoted at US$4 960 a ton.Doubts about the staying power of a global recovery kept Asian stocks soggy and currencies subdued. Japan’s Nikkei fell 1,38 per cent and the MSCI index of Asian stocks outside of Japan eased 1,5 per cent. -Nampa-Reuters