Aug 15, 2011 (Dow Jones) -- --Stronger equity markets stoke demand for commodities; oil nears $88 a barrel
--Weaker dollar also lends support
--Comex September copper rises 2c to $4.032/lb
By Matt Day and Tatyana Shumsky
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Copper futures rose Monday for a third consecutive session, buoyed by a weaker dollar and increased investor demand for risky assets such as commodities and equities.
The most actively traded copper contract, for September delivery, rose 2 cents, or 0.5%, to settle at $4.032 a pound on the Comex division of the New York Mercantile Exchange.
Global equity markets were stronger Monday on increased tolerance for risk, luring buyers to the copper market. At the close of Comex floor trading the Dow Jones Industrial Average was up 151 points at 11420 as investors cautiously returned to the stock market after last week's volatile trading.
"Some of that economic concern has been put aside for the moment, so copper is rebounding along with equity markets," said Dave Meger, director of metals trading at Vision Financial Markets.
Copper and stocks are both considered risky investments because of their sensitivity to changes in the economic growth outlook. The industrial metal has uses across many areas of the economy, from piping and wiring in construction and appliances, to consumer electronics and automobiles.
Futures had pulled back sharply at the beginning of the month as worries about the economic health of the U.S. and Europe rattled global markets and darkened the global growth outlook.
A weaker dollar added to copper's allure Monday, as dollar-denominated contracts seem cheaper to buyers using foreign currencies when the greenback eases. The ICE Dollar Index was at 73.907 at the close of Comex floor trading, down from 75.656 late Friday in New York.
"Four dollars--that's my line in the sand between bullish and bearish sentiment," said Adam Klopfenstein, senior market strategist with MF Global. He added that without a substantial move up in equities copper futures are likely to stay in a range between $3.95 and $4.05.
Benchmark copper futures Monday ended the above the psychologically important $4 a pound mark for a third consecutive session.
Thinly traded August-delivery copper rose 2.2 cents Monday, or 0.6%, to $4.0315 a pound.
Copper settlements (ranges include electronic and pit trading):
Aug $4.0315; up 2.20 cents; Range $4.0000-$4.0500
Sep $4.0320; up 2.00 cents; Range $3.9880-$4.0580