Copper Drops for First Time This Week as Equities Fluctuate

LONDON, July 17 -- Copper prices fell for the first time this week as fluctuating equity markets curbed investor optimism that metal demand will increase.

    The Standard & Poor's 500 Index dropped as much as 0.6 percent on concern that commercial lender CIT Group Inc. will run short of cash. Of all commodities, industrial metals have the highest correlation with stock markets, according to Deutsche Bank AG. Last week, the metal fell 4.1 percent as the S&P capped a fourth week of losses.

    "People are looking at the stock market as an indicator for the economy," said Michael K. Smith, the president of T&K Futures & Options in Port Saint Lucie, Florida.

    Copper futures for September dropped 0.25 cent to $2.3895 a pound on the Comex division of the New York Mercantile Exchange. Before today, copper jumped 8.2 percent this week, while the S&P rallied 6.1 percent.

    Earlier today, copper reached $2.41, the highest since June 12, after a report showed first-time U.S. jobless claims fell to the lowest since January, a sign the labor market may be stabilizing.

    Copper has surged 69 percent this year on speculation that the worst of the recession has passed and demand for metals will climb.

    On the London Metal Exchange, copper for delivery in three months was unchanged at $5,260 a metric ton ($2.39 a pound). The price reached a record $8,940 on July 2, 2008.

    (Source: Bloomberg)