* Decline in Chinese exports drives down commodity
* Copper hits eight-month low
* Mining stocks hit by Chinese trade data
By Caroline Valetkevitch
NEW YORK, March 10 World stock indexes fell and
the prices of copper and oil sank on Monday after surprisingly
weak Chinese trade data added to worries about a slowdown in the
world's second-largest economy.
China's exports unexpectedly tumbled in February, falling
18.1 percent from a year earlier and swinging the trade balance
into deficit. The data underscored recent concerns about the
outlook for China's economy, even though the Lunar New Year
holidays were blamed for the slide.
The data put a dampener on risk sentiment, which had been
boosted briefly by Friday's stronger-than-expected U.S. non-farm
China's CSI300 share index plunged 3.3 percent to
its lowest level in nearly nine months. Chinese gloom added to
the strain in emerging markets, compounding worries that the
U.S. Federal Reserve's reduction in stimulus will greatly curb
the flow of money.
"The weak China trade balance data caused some flight to
quality on less optimism about the global economy," said Jeffrey
Young, interest rate strategist at Nomura in New York.
Prices on benchmark 10-year U.S. Treasuries were
last up 3/32 to yield 2.78 percent.
The commodity-sensitive Australian and Canadian dollars
declined, both losing as much as half a percent
against the greenback in the wake of the plunge in exports from
On Wall Street, the Dow Jones industrial average fell
70.26 points or 0.43 percent, to 16,382.46, the S&P 500
lost 5.11 points or 0.27 percent, to 1,872.93 and the Nasdaq
Composite dropped 11.229 points or 0.26 percent, to
Shares of Freeport McMoRan Copper & Gold lost 3.3
percent to $31.14 as the signs of a slowing Chinese economy sent
London copper to an eight-month low. The S&P materials index
lost 0.6 percent.
European shares, as measured by the pan-European
FTSEurofirst 300 index, closed down 0.5 percent, hit by
declines in shares of mining companies sensitive to China's
ferocious appetite for raw materials. A global stock index
was down 0.6 percent and an emerging market
stock index was down 1.3 percent.
German steel maker ThyssenKrupp, down 3 percent,
was among the top losers in Europe as Chinese steel and iron ore
futures slumped to their lowest levels ever on concerns about a
slowdown in China, the world's top commodity buyer.
"Any poor news from China is always going to hit short-term
market sentiment, especially in the mining sector, and fears of
slower growth will hit base metals," said IPR Capital director
Despite weakness in Asian markets, a sense of relief in
Europe that tensions between Russia and the West over Crimea had
not escalated buoyed shares in early trading, though there was
no escape from the undercurrent of unease.
On Wall Street, Boeing Co shares lost 2.5 percent to
$125.31 and were the biggest drag on the Dow and S&P 500, after
the plane maker said on Friday that "hairline cracks" had been
discovered in the wings of about 40 787 Dreamliners that are in
production, another setback for the company's newest jet.
Separately, the disappearance of a Malaysian jetliner, a
Boeing 777-200ER, is an "unprecedented aviation mystery," a
senior official said on Monday.
Shares of Freescale Semiconductor were down 2
percent at $22.92. Twenty Freescale employees were on the
missing Malaysian plane, mostly engineers and other experts
working to make the company's chip facilities in Tianjin, China,
and Kuala Lumpur more efficient, said Mitch Haws, vice
president, global communications and investor relations.
CHINESE DATA WEIGHS ON AUSTRALIAN, CANADIAN DOLLARS
The Aussie traded 0.4 percent lower at $0.9031,
while the loonie was down 0.2 percent at $1.1104.
"The Chinese export numbers are the main driver this morning
- you can see that the Aussie and Canadian dollars are both
under pressure," said Alvin Tann, strategist with French bank
Societe Generale in London.
The yuan earlier fell as much as 0.5 percent and
Chinese short-term rates dropped after another low daily yuan
rate from China's central bank added to speculation Beijing is
quietly easing monetary policy to buttress wobbly growth.
The U.S. dollar held steady against major currencies,
supported by hopes that U.S. job growth would pick up in the
wake of last week's mildly encouraging report on hiring. The
dollar index was little changed at 79.743.
In the metals markets, London copper hit an eight-month low.
Three-month copper on the London Metal Exchange traded
down 1.36 percent to $6,690 a tonne. It earlier slid as low as
$6,608 a tonne, its weakest level since June 25 and within a
whisker off nearly three-year lows.
Adding to the pressure was China's imports of unwrought
copper, which fell 30 percent in February from January due to
weak Shanghai copper prices. Imports were still up 27
percent from last year's levels.
The Chinese data also weighed on oil. Brent crude
was trading 97 cents down at $108.03. U.S. oil fell $1.33
to $101.25 a barrel.