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Oil up on Iran comments, Wall Street ticks down

Published 10/03/2016, 05:20 PM
© Reuters. Traders work on the floor of the NYSE
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By Rodrigo Campos

NEW YORK (Reuters) - An index of stocks across the world ended flat on Monday while Wall Street dipped, and oil prices rose to a three-month high after Iran's leader called on non-OPEC producers to help support prices.

The U.S. dollar rose against a basket of its peers after strong manufacturing data, sterling brushed against a three-decade low versus the greenback and the Colombian peso fell after voters rejected a peace deal to end a more than 50-year-old war.

Traders were on the lookout for news from Deutsche Bank (DE:DBKGn), which is working to reach a settlement with U.S. authorities who have demanded a fine of up to $14 billion for the way the bank sold toxic mortgage-backed securities.

The German stock market was closed on Monday but Deutsche's U.S.-listed shares (N:DB) fell as much as 3.7 percent. The stock ended down 0.8 percent at $12.98 after hitting last week $11.185, a record low.

"The feeling is there will be a negotiation lowering that penalty but it's certainly a bit of an overhang on the overall market," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

The Dow Jones industrial average (DJI) fell 54.3 points, or 0.3 percent, to 18,253.85, the S&P 500 (SPX) lost 7.07 points, or 0.33 percent, to 2,161.2 and the Nasdaq Composite (IXIC) dropped 11.13 points, or 0.21 percent, to 5,300.87.

The pan-European STOXX 600 index (STOXX) ticked up less than 0.1 percent and the FTSEurofirst 300 index (FTEU3) ended flat. MSCI's gauge of stocks across the globe (MIWD00000PUS) dipped 0.05 percent.

Crude futures prices rose, taking Brent above $50 a barrel and U.S. crude to three-month highs after comments by Iran's leader exhorting the need for other oil producers to join OPEC in supporting the market.

"There's already a soft commitment from Russia that it will be part of the OPEC plan and if more non-OPEC members get on board, prices can only go higher," said Phil Flynn, analyst at the Price Futures Group brokerage in Chicago.

U.S. crude (CLc1) was up 0.9 percent at $48.66 a barrel and Brent (LCOc1) last traded at $50.81, up 1.2 percent on the day.

Sterling fell 1 percent against the dollar to its lowest since July, touching a low of $1.2815 and slightly above a 31-year low of $1.2796 after Britain on Sunday set a March deadline to start the process to leave the European Union. It also hit a three-year low against the euro of 87.47 pence per euro (EURGBP=).

The Colombian peso fell as much as 2.8 percent versus the dollar after voters rejected a hard-negotiated deal between the government and Marxist guerrillas to end a 52-year war. The currency ended down 1.65 percent.

The dollar index, which measures the greenback against a basket of six major currencies, gained on data showing the U.S. manufacturing sector grew by more than expected in September. The index (DXY) was last up 0.3 percent.

The manufacturing data boosted expectations that the Federal Reserve would raise interest rates by December, sending U.S. Treasury yields higher.

Benchmark 10-year notes (US10YT=RR) fell 6/32 in price to yield 1.6256 percent, up from 1.606 percent on Friday.

© Reuters. Traders work on the floor of the NYSE

Spot gold prices fell $3.80 or 0.3 percent, to $1,312 an ounce.

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