Stocks slip, copper hits 6-year low on China worries

By Caroline Valetkevitch

NEW YORK (Reuters) - Global stock indexes fell on Friday amid a ream of disappointing corporate results and forecasts, while copper slid to a six-year low on persisting worries over a supply glut and slowing economic growth in China.

Oil prices extended recent losses as supply concerns persisted. Weaker-than-expected U.S. October retail sales weighed on U.S. stocks in early trading and dragged down U.S. Treasuries yields to their lowest in a week.

The decline in copper follows data out of China this week that pointed to economic weakness, including industrial output hitting a seven-month low in October.

Benchmark copper on the London Metal Exchange earlier hit $4,787.50 a tonne. The metal used in power and construction ended little changed at $4,825 a tonne from $4,823.50 on Thursday. It is down more than 3 percent this week.

 

The supply of copper could tighten as mining firms cut back on capital expenditure, said James Butterfill, head of Research & Investment Strategy at ETF Securities.

"We expect miners to continue to cut capex, which raises concerns over their longer-term profitability," he said.

The MSCI all-country world index <.MIWD00000PUS> lost 1 percent, while the FTSEurofirst 300 <.FTEU3> ended down 0.83 percent, weighed down by some weak corporate earnings,

European shares are down 2.7 percent for the week, their biggest weekly loss since the beginning of September.

Along with the retail data, a disappointing forecast from Cisco , citing slower order growth and weak spending outside the United States, hurt sentiment on Wall Street.

The Dow Jones industrial average <.DJI> fell 117.88 points, or 0.68 percent, to 17,330.19, the S&P 500 <.SPX> lost 12.46 points, or 0.61 percent, to 2,033.51 and the Nasdaq Composite <.IXIC> dropped 42.12 points, or 0.84 percent, to 4,962.96.

Commerce Department data showed U.S. retail sales rose less than expected in October amid a surprise decline in automobile purchases.

"People's confidence that the consumer can somehow offset this industrial recession that we've had is really being shaken to the core with the disappointing numbers from some of these major retailers," said James Abate, CIO of Centre Funds.

The day's data reinforced the view of modest economic growth and tame inflation, pushing U.S. bond yields down.

Benchmark 10-year Treasuries notes > were last up 12/32 in price with a yield of 2.276 percent, down 4 basis points from late on Thursday. The 10-year yield has fallen 4 basis points on the week, snapping three straight weekly increases.

The dollar edged higher against major currencies as investors focused on expectations the Federal Reserve may still raise interest rates in December.

The dollar index <.DXY>, which measures the dollar against a basket of world currencies, rose 0.4 percent to 99.045. The index is down about 0.2 percent this week as profit-taking sent it lower earlier in the week.

The dollar has fallen this week as profit-taking on short positions sent it lower.

Oil fell as much as 3 percent, extending the week's loss to the largest in eight months, amid swelling storage of crude on both land and sea.[L3N1382GY]

U.S. crude was down $1.25, or 3 percent, at $40.50 a barrel. Brent was off 30 cents, or 0.7 percent, at $43.76.

Oil prices have fallen in seven of the last eight sessions, with losses accelerating after U.S. data Thursday affirmed a seventh weekly rise in U.S. crude inventories. [EIA/S]

(Additional reporting by Ailstair Smout and Pratima Desai in London, Abhiram Nandakumar in Bengaluru; and Dion Rabouin in New York; Editing by Nick Zieminski and Bernadette Baum)