FOREIGN INVESTMENT IN U.S. ASSETS REBOUNDED IN FEBRUARY, SUGGESTING THE TRADE DEFICIT WAS ADEQUATELY FINANCED FOR NOW, BUT A PAIR OF WEAKER-THAN-EXPECTED GAUGES OF THE HOUSING AND MANUFACTURING SECTORS SPARKED CONCERNS ABOUT NEAR-TERM ECONOMIC STRENGTH, REUTERS REPORTED. GEOPOLITICAL TENSIONS STRUCK ENERGY MARKETS, PUSHING OIL PRICES ABOVE $70 A BARREL FOR THE FIRST TIME IN NEARLY EIGHT MONTHS. STOCKS WERE BROADLY LOWER WITH OIL PRICES LESS THAN A DOLLAR AWAY FROM RECORD HIGHS. HIGH OIL PRICES MEAN CONSUMERS HAVE LESS MONEY TO SPEND OR INVEST AND CAN DRAG ON ECONOMIC GROWTH. EXPENSIVE ENERGY CAN ALSO RAISE COSTS FOR BUSINESSES AND POTENTIALLY PUSH UP INFLATION. HOWEVER, FOREIGN INVESTORS POURED A NET $86.9 BILLION INTO U.S. FINANCIAL ASSETS IN FEBRUARY COMPARED WITH AN UPWARDLY REVISED $69.1 BILLION IN JANUARY, ACCORDING TO A REPORT FROM THE TREASURY DEPARTMENT ON MONDAY. ECONOMISTS HAD EXPECTED A MODERATION IN NET INFLOWS TO $62.8 BILLION IN FEBRUARY. THE UPSWING SHOWED THE ATTRACTION OF HIGH U.S. INTEREST RATES RELATIVE TO OTHER MAJOR ECONOMIES WAS STILL STRONG. THE LARGER-THAN-EXPECTED PORTFOLIO FLOWS SOOTHED CONCERNS OVER THE LARGE U.S. TRADE DEFICIT OF $65.7 BILLION IN FEBRUARY, ALTHOUGH THE DATA WERE MORE THAN TWO MONTHS OLD. BECAUSE THE UNITED STATES RUNS SUCH A LARGE TRADE GAP -- LAST YEAR THE DEFICIT AMOUNTED TO NEARLY 6 PERCENT OF GROSS DOMESTIC PRODUCT -- IT HAS TO ATTRACT FOREIGN INVESTMENT TO FINANCE THE SHORTFALL. --MORE 2241 Local Time 1941 GMT
