Reuters: US Dollar Report: GLOBAL MARKETS-Oil tumbles on reserve talks, stocks follow

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GLOBAL MARKETS-Oil tumbles on reserve talks, stocks follow Mar 28th 2012, 17:43 Wed Mar 28, 2012 1:43pm EDT * S&P 500 fights to hold 1,400 level * U.S durable goods data miss forecasts * Yen stronger vs. greenback ahead of fiscal year end By Rodrigo Campos NEW YORK, March 28 (Reuters) - Oil prices fell on Wednesday as U.S. and some European governments mulled the release of strategic oil reserves, while commodity-related shares weighed on global equities. U.S. stocks fell in the wake of economic data that was slightly below expectations, with energy shares leading the market lower. France, the United States and Britain are in talks about the possible release of strategic oil stocks to help push fuel prices lower, French ministers said, only weeks ahead of the country's presidential election. Further pressuring prices, U.S. crude oil inventories posted the largest weekly build since July 2010, according to data from the U.S. Energy Information Administration. Brent crude, still up more than 15 percent this quarter, fell 1.4 percent to below $124 per barrel, while U.S. crude futures lost 2.2 percent, near $105. U.S. crude is up about 6 percent so far this year. The S&P 500 retreated from 4-year highs posted earlier this week and was battling to hold the 1,400 level. U.S. and European equity benchmarks are still on track to post their best first quarter in 14 years. "Investor anxiety has been rising due to the prolonged and significant rally, and we had a catalyst event in the collapse of energy stocks," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "It's a combination of investor jitters, given how far the rally has come, and technical levels that we are testing." He said holding the 1,400 level on the S&P 500 was an indication that the market's trend upward was still in place. In afternoon trading in New York, the Dow Jones industrial average was down 87.79 points, or 0.67 percent, at 13,109.94. The Standard & Poor's 500 Index was down 11.27 points, or 0.80 percent, at 1,401.25. The Nasdaq Composite Index was down 28.89 points, or 0.93 percent, at 3,091.46. MSCI's main global stock index fell 1 percent, retreating from an eight-month high hit Tuesday. The pan-European FTSEurofirst 300 index closed down 1 percent, with oil and bank shares among the biggest losers. The yen rose 0.4 percent against the U.S. dollar, lifted by seasonal flows from Japanese exporters buying at the end of their fiscal year. Any gains could be temporary, though, as the Bank of Japan is determined to keep monetary policy ultra loose. "In general as you get closer to the end of the month you probably see a little more demand for Japanese yen," said Kathy Lien, director of FX research at GFT in Jersey City, who added that much of the repatriation activity already happened last week. "I don't expect repatriation to take dollar/yen lower than 82," she said. U.S. Treasures traded mostly flat on the day, weighed down by tepid demand at the Treasury's $35 billion sale of five-year notes. The benchmark 10-year U.S. Treasury note was down 4/32, the yield at 2.1997 percent. New orders for long-lasting U.S. factory goods rose less than expected in February and a gauge of future business investment also fell short of forecasts, casting a shadow on the manufacturing sector's support of the recovery. Link this Share this Digg this Email Reprints

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