Apr 17, 2012 NEW YORK (Dow Jones)--Copper settled higher Tuesday, drawing strength from equity markets, after a turbulent trading day marked by weak U.S. economic data and worries about Europe.
The most actively traded contract, for May delivery, rose 1.90 cents, or 0.5%, to settle at $3.6470 a pound on the Comex division of the New York Mercantile Exchange.
Copper futures staged a late-afternoon rally as gains in U.S. equities bolstered investor interest in growth-sensitive assets. The Standard & Poor's 500 index was recently up 1.5% at 1390.44. Copper prices and equities tend to move in the same direction as demand for the raw material, and investor expectations of company profits, tend to rise as the economic outlook brightens.
However, copper's gains came at the end of a bumpy trading day as prices seesawed between positive and negative territory on mixed U.S. economic data. Copper is widely used in electronics, construction and general manufacturing.
U.S. industrial production was flat for the second consecutive month in March, missing the forecast of a 0.2% uptick. Meanwhile, capacity utilization slipped to 78.6% from 78.7% the previous month, in a sign that industrial activity is slowing.
Earlier in the day, a report showed home construction fell 5.8% in March from the prior month, the second straight decrease. The reading missed forecasts of a 0.7% increase. However, the number of new housing permits rose 4.5% last month, to the highest level since September 2008, while economists forecast a modest decline.
U.S. economic data had been a bright spot in the global economic milieu early in the year, but in recent weeks reports have been more mixed and investors are worried the recovery is slowing.
"There is no doubt that the bullish mood in the commodity markets has soured, as more investors begin to question the upside potential going into 2012," said Edward Meir, senior commodity analyst with INTL FCStone. "In addition to worries about another potential flare-up in the euro zone, markets are also watching developments in China with justifiable concern, given how prominent a buyer the country has become in a number of commodity markets over the years."
Copper settlements (ranges include electronic and pit trading):
Apr $3.6440; up 2.00 cents; Range $3.6085-$3.6455
May $3.6470; up 1.90 cents; Range $3.5845-$3.6520