May 03, 2012 NEW YORK (Dow Jones) -- Copper futures fell for a second day on Thursday, as investors bet that the global economy wasn't healthy enough to justify this week's four-week highs in prices for the industrial metal.
The most actively traded copper contract, for July delivery, fell 5.10 cents, or 1.4%, to settle at $3.736 a pound on the Comex division of the New York Mercantile Exchange.
A set of mostly disappointing economic data, beginning with manufacturing readings released on Wednesday, sapped the copper market's recent winning streak, knocking prices off the four-week highs reached on Tuesday.
Data showed the manufacturing sectors in China and the euro zone continued to shrink in April, and readings on U.S. factory orders and unemployment missed expectations.
"We've got growth, but it's not enough," said Frank Lesh, a broker with FuturePath Trading. "All of these [commodities] markets are waiting for some clarity."
U.S. service-sector activity slowed more than expected in April, according to a report released on Thursday by the Institute for Supply Management. The ISM's nonmanfuacturing purchasing managers index fell to 53.5 last month from 56 in March, missing forecasts for 55.5. Readings above 50 indicate activity is expanding.
The service sector doesn't tend to have much impact on copper demand, but the data bolstered the evidence that the U.S. economy, a bright spot this year amid worries about China and Europe, may be slowing down. A streak of disappointing economic data has tempered investor expectations for Friday's closely watched government report on U.S. unemployment.
"U.S. growth probably won't be enough to make up for China's demand shortfall," wrote Curt Woodworth, an analyst with Nomura, in a note.
Some growth-sensitive assets were under pressure on Thursday after European Central Bank chief Mario Draghi said that European politicians should take firmer steps to support growth. With some major European economies either already in or standing on the brink of recession, some politicians have suggested that the central bank should do more to support economic growth in the currency union.
Draghi, in a press conference, offered no hint at potential new steps the central bank might take to support growth in the euro zone.
Copper settlements (ranges include electronic and pit trading):
May $3.7335; down 5.20 cents; Range $3.7240-$3.7845
July $3.7360; down 5.10 cents; Range $3.7270-$3.7910
