* Brent crude hits 13-month low on ample supply
* German shares weigh after sentiment data shows Ukraine
* U.S. stocks end slightly lower; energy sector weighs
(Updates to U.S. market close)
By Rodrigo Campos
NEW YORK, Aug 12 Brent crude oil hit a 13-month
low on Tuesday as ample North American production outweighed
concern over supply from the Middle East, while stocks and the
euro were pressured by plunging investor morale in Germany,
Europe's largest economy.
German shares fell more than 1 percent and the euro weakened
against the U.S. dollar after the ZEW gauge of economic
sentiment fell to its lowest since December 2012. German
investors fretted over the impact that sanctions against Russia
over its support of Ukrainian separatists could have on the
Moscow said on Tuesday that a convoy of 280 trucks carrying
humanitarian aid had set off for Ukraine, but Kiev said it would
not allow the vehicles to cross into its territory. Ukraine and
Western governments warned Russia against any attempt to turn
the operation into a military intervention.
Political tension in Iraq and "difficult" talks between
Israelis and Palestinians as a 72-hour truce holds in Gaza are
also keeping investors on edge.
Wall Street closed slightly lower on weak volume, pressured
by declines in energy stocks as crude prices fell.
"We already know the Middle East is unstable and that Russia
is sending an aid convoy to Ukraine, so this is all the
continuation of a longer-term issue that has been boiling for a
long time. The market has already discounted most of that," said
Malcolm Polley, president and chief investment officer of
Stewart Capital Advisors in Indiana, Pennsylvania.
"Some people see others selling so they'll just follow
The Dow Jones industrial average fell 9.44 points, or
0.06 percent, to end at 16,560.54, the S&P 500 lost 3.17
points, or 0.16 percent, to 1,933.75 and the Nasdaq Composite
dropped 12.08 points, or 0.27 percent, to 4,389.25.
An MSCI index of stocks in major developed and emerging
economies dipped less than 0.1 percent and a
pan-European benchmark fell 0.2 percent, while
Frankfurt's DAX index lost 1.2 percent, its biggest
decline since Aug. 1.
Brent oil prices were down 1.6 percent at $103.01
while U.S. crude fell 0.8 percent to
The euro fell 0.2 percent against the U.S. dollar,
bringing the decline since the start of July to 2.4 percent.
"The recent string of disappointing economic indicators from
(Germany), along with an escalation of sanctions toward Russia,
has institutional investors and analysts nervous about future
economic conditions," said Scott Smith, senior market analyst at
Cambridge Mercantile Group in Calgary.
In U.S. debt markets, the selling pressure from this week's
bond supply has been offset by a steady bid for safe-haven
Treasuries on worries about conflicts in Iraq, eastern Ukraine
and Gaza. Benchmark 10-year yields last week hit a
14-month low of 2.349 percent and were recently at 2.449
"The U.S. bond market has been driven a lot by external and
geopolitical factors rather than improving domestic data," said
Robert Tipp, chief investment strategist at Prudential Fixed
Income in Newark, New Jersey.
A three-year note sale fetched a yield of 0.924 percent,
which was the lowest in four months.
Gold was little changed at $1,308.90 an ounce. Copper
slipped 0.4 percent to $6,965 a tonne -near a six-week
Investors kept an eye on Iraq as Prime Minister-designate
Haider al-Abadi won endorsements from the United States and Iran
as he called on political leaders to end feuds that have allowed
jihadists to seize a third of the country.
Still, al-Abadi's Shi'ite party colleague, Nuri al-Maliki,
has refused to step aside after eight years as premier that have
alienated Iraq's once-dominant Sunni minority and irked
Washington and Tehran.
(Additional reporting by Richard Leong, Akane Otani, Robert
Gibbons and Gertrude Chavez-Dreyfuss; Editing by Leslie Adler,
Nick Zieminski and Dan Grebler)