China said Friday it would increase the amount of money its banks must hold in reserve. It's the second time the country has done so in the past month. Chinese leaders are worried that runaway borrowing there is leading to speculative bubbles.
Prospects of slower growth in China, the world's third-largest economy, put a damper on demand for industrial commodities like oil and copper. China has been a major importer of basic materials as its economy forges ahead.
March copper prices fell 4.95 cents to settle at $3.102 a pound.
Other industrial metals also fell. Silver for March delivery fell 14.3 cents to settle at $15.447 an ounce, while palladium dropped 80 cents to $418.15 an ounce. Platinum for April deliver fell $8.20 to $1,511.10 an ounce.
Gold also dropped while the dollar rose. The pair typically move in opposite directions. April gold lost $4.70 to settle at $1,090.00 an ounce. The ICE Futures US dollar index, which measures the dollar against six foreign currencies, rose 0.4 percent.
Energy prices also fell because of concerns China might not import as much oil. They also dropped after a new report showed ample supplies of most petroleum products.
The Energy Information Administration said U.S. inventories of crude and gasoline rose last week, while supplies of distillate fuel used for heating oil dropped less than expected.
There is plenty of supply even though much of the nation is blanketed in cold weather, which would normally increase demand and eat into reserves.
Benchmark crude for March delivery fell $1.15 to settle at $74.13 a barrel on the New York Mercantile Exchange.
In other Nymex trading in March contracts, heating oil dropped 4.41 cents to $1.9189 a gallon. Gasoline fell 0.62 cents to $1.9295 per gallon.
Natural gas was the lone gainer among energy after the EIA said stockpiles fell more than expected last week. March natural gas rose 7.2 cents to settle at $5.468 per 1,000 cubic feet.
Elsewhere, grains were mixed.
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