* Shares fall on weak commodities; pharma weighs on Wall St
* BOJ downgrades economic view, but yen firms vs greenback
* Oil falls again as oversupply worries resurface
(Updates prices, changes comments)
By Rodrigo Campos
NEW YORK, March 15 (Reuters) - Stocks in major markets fell
on Tuesday after the Bank of Japan painted a bleaker picture of
the world's third-largest economy and as U.S. retail sales data
brought down expectations of a strong first quarter.
The yen rose sharply against the U.S. dollar, crude oil
dropped and emerging market shares fell the most in more than a
month.
U.S. retail sales fell less than expected in February, but a
sharp downward revision to January's numbers cooled expectations
for a strong quarter of growth for the U.S. economy.
However, the Federal Reserve is not expected to remove the
prospect of a rate hike in the near future when it ends its
two-day meeting on Wednesday.
"The Fed, I believe, is not going to do anything to take
tightening out of the equation," said Paul Zemsky, chief
investment officer, multi-asset strategies and solutions at Voya
Investment Management in New York.
He said first-quarter growth in the United States looks "a
bit worse" after the retail sales data. Taken with the recent
run-up in stocks and ahead of a Fed statement, that creates the
environment for profit-taking.
Healthcare weighed the most on the S&P 500, hurt by a 50
percent drop in shares of Valeant after the Canadian drugmaker
slashed its 2016 revenue forecast and said a delay in filing its
annual report could mean a debt default. NL3N16N3QY
After trading slightly lower for most of the day, the Dow
Jones industrial average .DJI was up 2.57 points, or 0.01
percent, to 17,231.7, the S&P 500 .SPX lost 6.19 points, or
0.31 percent, to 2,013.45 and the Nasdaq Composite .IXIC
dropped 23.66 points, or 0.5 percent, to 4,726.62.
The pan-European FTSEurofirst 300 stocks index .FTEU3
ended down 1 percent, dragged lower by commodity-related stocks.
The STOXX Europe 600 Basic Resources index .SXPP fell 4.7
percent.
MSCI's gauge of stocks in major markets .MIWD00000PUS fell
0.7 percent while emerging market shares .MSCIEF dropped 1.7
percent, the most since Feb. 11.
YEN RALLY
The yen strengthened after the BOJ removed from its
post-meeting statement language used after it cut rates in
January that it would lower them further into negative territory
if needed.
The dollar was down 0.6 percent at 113.13 yen JPY= .
"The yen was already strengthening," said Vassili
Serebriakov, currency strategist at BNP Paribas (PA:BNPP) in New York. The
U.S. retail sales data "just added to the mood of risk aversion,
which is what's helping the yen against the dollar."
The euro EUR= was little changed against the greenback at
$1.1105. Sterling GBP= fell 1 percent to $1.4155 after a new
opinion poll showed supporters of Britain leaving the European
Union were ahead in the run-up to a June referendum on the
issue.
Oil prices dropped further after the Organization of the
Petroleum Exporting Countries said it expected lower demand for
crude in 2016 than previously thought.
The oil market will be on the lookout later on Tuesday for
preliminary data on U.S. crude stocks, due at 4:30 p.m. EDT
(2030 GMT) from industry group American Petroleum Institute.
Brent crude LCOc1 last traded down 1.8 percent at $38.84 a
barrel, further diluting a six-week recovery in oil prices that
has helped buoy stocks markets. U.S. crude CLc1 lost 2.8
percent to $36.15.
"The rally is now retreating on fears that OPEC will
continue to flood the market with oil in a world where demand
may falter," said Phil Flynn, analyst at the Price Futures Group
in Chicago.
U.S. Treasury yields were little changed, with the 10-year
note US10YT=RR down 1/32 in price to yield 1.9681 percent.
Spot gold XAU= fell for a third straight session and five
of the last six. Copper CMCU3 was little changed after earlier
falling as much as 1.3 percent.