March 20, 2012 / 4:32 PM / 6 years ago

GLOBAL MARKETS-Stocks fall on China, oil down on Saudi assurance

* Chinese iron ore demand seen flattening
    * US stocks fall after strong rally
    * Growth-driven currencies fall on China, dollar up

    By Walter Brandimarte	
    NEW YORK, March 20 (Reuters) - Renewed concerns about
China's economic growth weighed on global stocks and boosted
bonds on Tuesday, while oil prices dropped more than 1 percent
on expectations Saudi Arabia would act to stem any rise that
could hurt the global economy.	
    Safe-haven U.S. government bonds rose as investors took some
profits in the stock market, while the dollar rose broadly as
growth-related currencies were pressured by Chinese worries.	
    Concerns about the scale of China's economic slowdown
resurfaced as BHP Billiton, the world's largest miner,
said it was seeing signs of "flattening" iron ore demand from
the country. 	
    U.S. stock indexes traded more than half a percentage point
lower after a rally on Monday drove the S&P 500 to a level less
than 10 percent shy of its 2007 all-time high.	
    "It seems like a market that probably just needs to take a
rest, but I wouldn't be surprised (if) we rally into the day,"
said Jack Ablin, chief investment officer at Harris Private Bank
in Chicago. 	
    "It is now a focus back on the fundamentals on the economy
and those news items aren't quite as daunting. It's really just
fine tuning."	
    The Dow Jones industrial average was down 66.26
points, or 0.50 percent, at 13,172.87. The Standard & Poor's 500
Index was down 6.84 points, or 0.49 percent, at 1,402.91.
The Nasdaq Composite Index was down 19.04 points, or
0.62 percent, at 3,059.28. . 	
    The S&P 500 has gained more than 11 percent so far this year
as a steady flow of strong U.S. economic data encouraged stock
investors. Tuesday's U.S. housing data was mixed, however, with
housing starts falling in February but permits for future
construction jumping to the highest level since October 2008.
    World stocks measured by the MSCI All-Country World Index
 dropped 0.8 percent, after closing on Monday
near levels last seen in late July. 	
    In Europe, the FTSEurofirst 300 index fell 1.1
percent as autos and miners were hit by worries of a Chinese
economic slowdown.	
    "Stocks are being driven down on reports of major discounts
amongst the luxury good car brands in China and comments about
weak iron ore demand," said Richard Batty, strategist at
Standard Life Investments, with $248.37 billion of assets under
    The dollar rose 0.2 percent against a basket of major
trading-partner currencies, according to the U.S. Dollar Index
. The euro weakened 0.1 percent against the
greenback, to $1.3222.	
    "Investors are snapping up U.S. dollars this morning and the
rally has all the characteristics of a safe-haven bid," said
Kathy Lien, director of currency research at GFT Forex in Jersey
City, New Jersey.   	
    U.S. crude oil prices dropped 1.7 percent to $106.25
a barrel.	
    Benchmark 10-year Treasury notes were trading
5/32 higher in price to yield 2.35 percent, down from 2.38
percent late Monday, while 30-year bonds gained
18/32 to yield 3.45 percent, down from 3.48 percent.

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