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GLOBAL MARKETS-Stocks drop on weak commodities, U.S. rate hike hint

Published 2015-11-12, 04:23 p/m
© Reuters.  GLOBAL MARKETS-Stocks drop on weak commodities, U.S. rate hike hint
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(Adds close of U.S. markets)
* Wall St, European shares post worst day since September
* Commodities slide sharply on weak world demand
* Dollar slips, but traders expect gains before long

By David Gaffen and Herbert Lash
NEW YORK, Nov 12 (Reuters) - Global equity markets fell on
Thursday, pulled lower by declining commodity prices that hurt
energy shares, and comments by a Federal Reserve policymaker who
hinted that a widely-anticipated interest rate hike next month
is possible.
Gold fell to its lowest level since early 2010 on concerns
about a rate hike by the U.S. central bank, and copper prices
tumbled to their weakest in more than six years.
Weakness on Wall Street, a drop in commodity prices and poor
earnings results dragged shares lower in Europe. The
pan-European FTSEurofirst 300 index .FTEU3 closed down 1.6
percent at 1,470.05 points in its biggest daily decline since
Sept. 28.
Stocks weakened after U.S. jobs data supported the view that
the Fed will raise rates in December. Initial claims for state
unemployment benefits were unchanged at a seasonally adjusted
276,000, close to levels last seen in the early 1970s.

The MSCI all-country world index .MIWD00000PUS lost 0.86
percent, while U.S. stock indexes posted their steepest fall
since late September.
Following October's surge of about 8 percent, stock
investors worried about China's economy and a U.S. rate hike are
taking money off the table, said Michael Matousek, head trader
at U.S. Global Investors Inc in San Antonio, which manages about
$1.3 billion.
"That's why you have some of this selloff. We're down but
it's not like the sky is falling," Matousek said.
The Dow Jones industrial average .DJI closed down 254.15
points, or 1.44 percent, to 17,448.07. The S&P 500 .SPX fell
29.03 points, or 1.4 percent, to 2,045.97 and the Nasdaq
Composite .IXIC lost 61.94 points, or 1.22 percent, to
5,005.08.
Crude prices hit 2-1/2 month lows after the U.S. government
reported a stockpile build four times above market expectations
and OPEC said its current output could result in a daily surplus
of more than 500,000 barrels by next year.
Crude futures fell about 3 percent after the U.S. Energy
Information Administration said stockpiles rose by 4.2 million
barrels last week, citing higher imports. EIA/S
U.S. crude CLc1 fell $1.18 to settle at $41.75 a barrel,
and Brent crude LCOc1 slipped $1.75 to settle at $44.06 a
barrel. urn:newsml:reuters.com:*:nL3N1371AH
The dollar had rallied earlier against the euro on remarks
by ECB head Mario Draghi, who warned that price inflation, a key
measure of economic health, was lagging. urn:newsml:reuters.com:*:nL8N1372CS
But the currency markets shifted after St. Louis Fed
President James Bullard, generally a more hawkish member of the
U.S. central bank, suggested industrial nations may be headed
into an era of permanently low rates. urn:newsml:reuters.com:*:nN9N122017
New York Fed President William Dudley later said "it is
quite possible that the conditions the Committee has established
to begin to normalize monetary policy could soon be satisfied."
urn:newsml:reuters.com:*:nN9N122019
The dollar dropped for a second day as investors booked
profits from its recent heady rise, sending other major
currencies higher.
The dollar fell against the euro, yen and Swiss franc, but
analysts remained bullish on its longer-term outlook.
The dollar index .DXY , which tracks the greenback against
a basket of six major currencies, fell 0.49 percent to 98.528.
The euro EUR= rose 0.57 percent to 1.0804, while the yen
JPY= fell 0.19 percent to 122.59.
U.S. Treasuries prices slipped as selling linked to more
corporate supply and $16 billion of 30-year bonds was mitigated
by some safe-haven demand spurred by a sharp decline on Wall
Street. urn:newsml:reuters.com:*:nL1N1372M4
The benchmark 10-year Treasuries note US10YT=RR fell 1/32
in price to yield 2.3169 percent.

(Editing by Nick Zieminski and Bernadette Baum)

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