BASE METALS: Weak Equity Market Drags Down Comex Copper

NEW YORK (Dow Jones) - Comex copper futures followed the stock market lower on Friday, roaring as crude oil prices cast a shadow over global economic growth.
The most actively traded contract for delivery in May settled up 0.1%, or 0.45 percent lower to $ 4.4855 per pound on the Comex division of the New York Mercantile Exchange.
The contract for the next month for March delivery settled 0.1%, or 0.25 percent, to $ 4.4725 per pound.
A steady drop in the Dow Jones Industrial Average, which saw the 30 component stocks in negative territory for the 1 pm, weighed on copper prices Friday. The red metal is widely used in industrial processes, and is sensitive to the expectations of investors in this sector of the market.
The Dow Jones recently was 165.0 points, or 1.4%, to 12,093.2.
"Copper is used in processes as different as the Dow Jones is reduced and economic activity slows there will be less demand for it," said Charles Nedoss, senior market strategist at futures Olympus.
Meanwhile, reports of fighting near Libya's oil facilities pushed oil prices to their highest level since September 2008. Simmering unrest in the Middle East has fueled investor concerns about oil supply security, the lifting of crude oil futures to a high of $ 104.44 a barrel on Friday.
Rising energy prices are considered a burden on economic growth, since they force consumers to divert money from discretionary spending that fuels economic activity. In the case of copper, this means less demand for goods and iPads, air conditioners and automobiles, all of which use the metal.
Earlier in the day, copper futures rose to a peak of $ 4.5540 a pound ahead of the U.S. nonfarm payrolls report for traders bid prices higher amid positive expectations.
The U.S. economy added 192,000 new jobs in February while the unemployment rate fell to 8.9%, down 9% for the first time since April 2009, the Labor Department said in its monthly report Friday.
Economists expect the unemployment rate increased to 9.1% and payrolls forecast to rise 200,000.
sustained improvement in the U.S. labor market supports the demand of copper. The red metal is widely used in consumer products, electrical and electronics, a sector that does well when consumers have more discretionary income.
However, copper prices surged highs after data that market participants moved to cash in profits.
"We stayed until the market was expecting a good number, we have, and we are taking profits," said Frank Lesh, an analyst at FuturePath Trading in Chicago.

(Source: http://online.wsj.com/article/BT-CO-20110304-710527.html)