Stocks fall as Libya drives oil, gold higher

By Walter Brandimarte

NEW YORK | Mon Mar 7, 2011 5:08pm EST

NEW YORK (Reuters) – Global stocks fell on Monday as the growing violence in Libya and worries about other Middle Eastern countries drove prices of oil and gold higher, raising concerns about the global economic recovery.

Oil jumped to a 2-1/2-year peak while gold hit a record high as fighting escalated around one of Libya’s key oil ports. Prices of both retreated later on talk that Libyan leader Muammar Gaddafi was trying to negotiate his exit from the country.

Also weighing on U.S. stocks was a Wells Fargo downgrade of the semiconductor sector, which has been leading a rally on Wall Street since the beginning of September. Asian stocks looked set to open lower, with Nikkei futures traded in Chicago falling 1.9 percent to 10,450.00 points.

The euro was little changed against the dollar, after reaching a four-month high against the U.S. currency, as expectations of an interest rate hike by the European central bank faded. Resurging debt concerns triggered by a Moody’s downgrade of Greece also weighed on the European currency.

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