MW: Copper slumps as earnings fuel economic worries
Gold rises near $900 as stocks, crude oil move lower; silver also gains
Copper futures slumped Tuesday in New York for a second session, as gloomy earnings reports from Caterpillar Inc. and its peers fueled economic fears, reducing demand for the critical industrial metal. Gold rose for a second session.
Construction and mining-equipment firm Caterpillar reported a first-quarter loss Tuesday, comparing with a profit a year ego. It also cut its sales outlook. Raising bearish sentiment, crude oil and U.S. stock futures also moved lower.
May copper fell 7.6 cents, or 3.6%, to $2.0275 a pound in early North American electronic trading. It has slumped nearly 8% in the first two sessions of the week. Meanwhile, June gold rose $3.30, or 0.4%, to $890.30.
"The sell-off in [base] metals was attributable to the less-than-stellar [U.S. economy]," said Edward Meir, an analyst at MF Global. "Recent U.S. macro numbers have been unusually soggy, and thus capable of reversing the price gains made in recent weeks."
Copper has mostly been on the rise since February on hopes that the economic crisis may have bottomed. Its prices rose above $2 a pound earlier this month for the first time in more than five months. But as hopes over a swift economic recovery dimmed, copper has moved lower.
Caterpillar wasn't the only company releasing gloomy earnings report Tuesday. DuPont , one of the biggest chemical maker, said first-quarter net income plunged 59% amid "severe decline in global industrial demand."
Even the banking sector, which had been reporting upbeat results, didn't survive. Bank of New York Mellon Corp. said net income slumped 51%.
Disappointing earnings pushed U.S. stock futures lower, indicating a lower opening on Wall Street. Meanwhile, crude oil fell for a second session, after its 8.8% slump on Monday, the biggest one-day loss in seven weeks.
Gold and some other precious metals are the only commodities that made gains Tuesday, as investors turned to the yellow metal for safety. Silver for May delivery rose 5.5 cents, or 0.5%, to $12.16 an ounce. June palladium gained $1.50, or 0.7 %, to $227.50 an ounce.
Bucking the trend, July platinum lost $3.10, or 0.3%, to $1,164.00 an ounce.
Elsewhere, holdings in SPDR Gold trust , the biggest gold exchange-traded fund, stood at 1,105.98 tons Monday, unchanged from a day earlier, according to the latest data from the fund.
