* Brent jumps over 2 pct on Libya, lack of OPEC action
* Portugal sells bonds, long-term financing worries remain
* European stocks close down; IBM shares support Dow
(Updates with U.S. markets close, adds Nikkei futures)
By Walter Brandimarte
NEW YORK, March 9 Brent oil prices jumped on
Wednesday, weighing on global stocks, as escalating violence in
Libya increased fears that higher energy costs could choke the
global economic recovery.
U.S. Treasuries prices rose on a safety bid following the
sale of Portuguese debt at unsustainably high yields. Appetite
for safe-haven assets also drove strong demand in an auction of
Mining stocks led European equities lower as prices of key
base metals fell on concerns about economic growth as oil
prices rose. Wall Street was also pressured by a disappointing
profit outlook from chip maker Texas Instruments, but a jump in
IBM shares supported the Dow.
Nikkei futures traded in Chicago NKH1 were little changed
at 10,565.00, showing investors' lack of conviction in a market
Brent oil LCOc1 jumped 2.55 percent to $115.94 a barrel
as fighting in Libya intensified and OPEC saw no need for an
emergency meeting to consider raising output. Worries that the
unrest could spread further in the Middle East also left
"It's a fear trade," said Michael Hewson, an analyst at CMC
Markets. "It's about the fear of these troubles escalating --
there is some concern about how the Saudi Day of Rage will go
Activists in Saudi Arabia have set up Facebook pages
calling for protests on March 11 and 20.
Expectations that the Organization of the Petroleum
Exporting Countries would respond to the decline in Libya's
output by rising production had driven oil prices lower on
Tuesday, one day after they hit a 2-1/2-year high.
In New York, however, U.S. crude oil futures CLc1 closed
lower, after seesawing between gains and losses, as investors
eyed a greater-than-expected rise in U.S. stockpiles last week.
Oil in New York fell 0.61 percent to settle at $104.38 a
World stocks edged lower, with the MSCI All-Country World
Index .MIWD00000PUS down 0.1 percent at 343.21 points.
On Wall Street, the Dow was cushioned by IBM (IBM.N), which
jumped 2.2 percent to $165.86. The tech giant's shares hit an
all-time high one day after it stuck to its promise to nearly
double profits by 2015.
A weaker-than-expected earnings target by Texas Instruments
TXN.N weighed on the Nasdaq, however. Shares of the chip
maker fell 3.1 percent.
The Dow Jones industrial average .DJI dipped 1.29 points,
or 0.01 percent, to 12,213.09, while the Standard & Poor's 500
Index .SPX slipped 1.80 points, or 0.14 percent, to 1,320.02.
The Nasdaq Composite Index .IXIC fell 14.05 points, or 0.51
percent, to 2,751.72.
In Europe, the FTSEurofirst 300 .FTEU3 index of top
shares closed down 0.23 percent.
PORTUGAL IN NEED
Prices of U.S. government bonds rose as investors moved to
safe-haven assets after an auction of Portuguese debt revived
worries about the financial troubles of peripheral euro zone
U.S. benchmark 10-year Treasury notes US10YT=RR gained
21/32 in price, with the yield at 3.4675 percent. Prices rose
further after the high yield in an auction of $21 billion of
reopened 10-year notes came in below market expectations.
Portugal was able to sell 1 billion euros in two-year bonds
at an auction but its borrowing cost was the highest since it
joined the euro. Lisbon said such yields were unsustainable in
the long run without Europe-wide action.
"The auction was always going to go OK ... but I don't
think clients are particularly interested in buying the bond,"
said a trader in London. "The problems remain -- we've got the
March 25 summit coming up, we've got continued selling in
Euro zone leaders are expected to agree on Friday on the
next steps in their year-long effort to quell the region's debt
crisis, but the summit is unlikely to produce a breakthrough.
The euro fell from an earlier high to trade flat against
the dollar as expectations of a euro-zone interest rate hike
next month faded and investors focused on the region's debt
Investors worry that monetary policy tightening by the
European Central Bank would further raise borrowing costs for
peripheral euro zone economies.
The euro EUR= was unchanged at $1.3903, falling from an
earlier four-month high of $1.4036 hit on electronic trading
Copper for three-months delivery CMCU3 on the London
Metal Exchange closed at $9,275 a tonne, down from a close of
$9,530 a tonne on Tuesday.
(Additional reporting by Kirsten Donovan, Karen Brettell,
Edward Krudy, Claire Milhench; Editing by Leslie Adler)