Oil and metals prices fell on Monday, extending recent losses and weighing on the shares of energy firms and currencies of commodity exporters such as Australia and South Africa, according to Reuters. But after early losses, the broader U.S. market edged higher. Traders said this week's options expiration had increased volatility. Crude oil futures briefly dipped to five-month lows as worries grew about the strength of the global economy, while gold prices momentarily crashed below $600 an ounce for the first time in more than two months. Although lower energy and commodities prices would likely reduce procurement costs for many industries, a positive for equities overall, some analysts said investors were taking the collapse in prices as a signal of economic troubles ahead. "People are still very concerned that the reason oil is deteriorating in price is that economic conditions in the U.S. and globally are diminished," said Ned Riley, chief investment officer at Riley Asset Management in Boston. The drop in oil prices, which have fallen more than 15 percent from record highs struck in July, weighed on the shares of energy giants such as Exxon Mobil Corp.. The Dow Jones industrial average, after being down most of the session, turned higher and was up 25 points, or 0.2 percent, at 11,416. The Standard & Poor's 500 Index was up 3 points, or 0.24 percent, at 1,302, while the Nasdaq Composite Index added 12 points, or 0.6 percent, at 2,178. In European trade, miners Anglo American and Rio Tinto dropped more than 4 percent while heavyweight oil firms BP and Royal Dutch Shell also dipped. The pan-European FTSEurofirst 300 index of top European shares was down 0.4 percent at 1,351.3, surrendering Friday's 0.4 percent rise. Japan's Nikkei average earlier fell 1.8 percent to 15,794.4, its lowest close in two weeks as surprisingly weak machinery orders data spurred selling of machinery company shares. In volatile trade, crude oil futures for October delivery fell as low as $64.85 per barrel, before recovering to around $66.12 by early afternoon in New York, only slightly down from the level late on Friday. Gold futures in New York were down 3 percent on the day at $598.70 an ounce on COMEX, and earlier dipped to $589.60, the lowest since late June. U.S. Treasury debt prices fell on Monday as traders sold to adjust positions ahead of a heavy slate of non-government bond issuance. Roughly $20 billion of corporate bond issuance is expected this week. The benchmark 10-year U.S. Treasury note was down 10/32, with the yield at 4.82 percent. The 2-year U.S. Treasury note lost 2/32, with the yield at 4.85 percent. Meanwhile, in currency markets the South African rand , Australian dollar, and Brazilian real all took a hit from the slide in commodities prices. The yen touched a two-month low against the dollar and tumbled versus the euro as a worsening Japanese interest rate outlook soured investors on the currency. A decline in Japanese factory orders hit the yen overnight and traders said selling picked up after European Central Bank board member Juergen Stark hinted at an October interest rate hike in interviews with French and German media. The euro was up 0.8 percent at 149.25 yen. The dollar was up 0.6 percent at 117.61 yen, near the 117.88 hit on July 19. The euro was up 0.2 percent at $1.2695, off its session peak of $1.2741 but above Friday's six-week trough of $1.2651.
