High oil inventories push Wall Street stocks down

Stocks on Wall Street have fallen for a second day on fears poor economic conditions will restrain commodity demand and hurt profits of metals and oil companies.

The Dow Jones Industrial Average closed 26 points down at 9070.72, a 0.1% fall, amid declines in energy components Chevron and Exxon Mobil and manufacturers Caterpillar and General Electric.
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The broad S&P 500 shed 0.5% to 975.15 as its energy sector sank 3.2% and its basic-materials group slumpd 2.6%. It was recently at 974.

Energy stocks fell as crude-oil futures slid to $63.35 a barrel after US inventory data showed a surprise increase in stockpiles. ConocoPhillips, which posted a 76% decline in earnings, was down 4.4%.

ArcelorMittal fell 7% after the world's largest steelmaker reported a loss that was wider than expected amid a slump in sales. Other metals stocks also sank, with Dow component Alcoa sliding 2.4%.

A sluggish five-year Treasury auction also weighed on stocks. The $US39 billion sale of 2.625% five-year bonds, the largest such sale ever, wasn't bid heavily enough to prevent the government from paying a higher rate on its borrowing.

Other economic signals were mixed. Durable-goods orders fell 2.4% last month, though orders outside transportation sector rose.

Canadian stocks retreated for a second day, led by energy and raw-materials producers, as commodities plunged and home prices fell on an annual basis for the sixth month in a row.

Energy companies fell as crude prices slid the most in three months and Talisman Energy said second-quarter profit dropped 85%. Suncor Energy led declines among companies in the Canadian equity benchmark, retreating as much as 4.1%. Sun Life Financial and Manulife Financial slipped at least 2.3%.

The S&P/TSX Composite Index fell 107 points, or 1.0%, to 10,462.99.

European shares rose, led higher by chemical producers and auto makers while ignoring losses on Wall Street.

The pan-European Dow Jones Stoxx 600 index rose 0.8% to finish at 220.37, marking its 11th rise in 13 sessions.

On a regional level, the French CAC-40 index rose 1% to settle at 3365.62, the German DAX index climbed 1.8% to close at 5270.32 and the UK FTSE 100 index gained 0.4% to end at 4547.53.

Commodities: Oil, gold down

Crude-oil futures tumbled 6% to near $US63 a barrel after inventory data showed a surprise hefty increase in crude oil stocks.

Light, sweet crude for September delivery fell to a low of $US63.04 a barrel in New York, the lowest intraday price since July 17. Closing prices were down $US3.88 at $US63.35 a barrel.

Gold futures fell, joining a broad-based sell-off in commodities, as a stronger US dollar reduced the precious metal's appeal as a hedge against a weaker currency.

Gold for August delivery slipped $US11.90, or 1.3%, to end at $US927.20 an ounce in New York. The contract hit an intraday low of $925.20 an ounce.

Currencies: Euro down, dollar up

The euro fell to a two-week low against the dollar after a decline in US stocks and a poor auction of five-year Treasury notes.

The euro fell to an intraday low of $1.4007, its lowest level since July 15.

The euro was also down at ¥133.07 from ¥133.99 while the dollar was at ¥94.94 from ¥94.55. The UK pound was at $1.6363 from $1.6442.