By Rodrigo Campos
NEW YORK (Reuters) - The U.S. dollar weakened on Monday after comments from Federal Reserve officials hinted that interest rate hikes could be delayed, lifting pressure off metals prices, but stocks accelerated losses in the afternoon.
Stronger-than-expected data out of China gave the bulls some respite, but traders remained cautious after numbers out of China and Germany last week pointed to a global slowdown.
Brent crude oil fell to its lowest level in almost four years after key Middle East producers signaled they would keep output high even if that meant lower prices.
Stock traders on Wall Street were bracing for the full onslaught of the quarterly earnings season, with many expecting the next move in equities to take its cue from corporate outlooks for the rest of the year.
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Technical indicators dominated trading as the S&P 500 broke below both 1,900 and its 200-day moving average.
"The fact we broke 1,900 on the S&P, the 200-day moving average, if we don't close above there today, that means the trip to lower levels is more than probable at this point," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
The Dow Jones industrial average fell 75.74 points, or 0.46 percent, to 16,468.36, the S&P 500 lost 13.03 points, or 0.68 percent, to 1,893.1 and the Nasdaq Composite dropped 25.48 points, or 0.6 percent, to 4,250.76.
The S&P 500 last week posted its largest weekly decline since March 2012 on continued concern about the strength of the global economy.
The MSCI All-Country World index was down 0.1 percent after earlier hitting a seven-month low. The FTSEurofirst 300 index of top European shares closed up less than 0.1 percent and Nikkei futures fell 1.1 percent.
Brazilian shares rallied 5.6 percent after market-friendly presidential candidate Aecio Neves, who will face incumbent Dilma Rousseff in a runoff vote on Oct. 26, gained momentum in election polls.
The U.S. bond market was closed for the Columbus Day holiday. Chinese trade data eased fears of a slowdown in the world's second-largest economy, with exports having grown 15.4 percent year-on-year in September and imports up 7 percent in terms of value, both ahead of market expectations. But broader concerns about global growth remained.
Ratings agency Standard & Poor's on Friday revised France's credit outlook to negative and cut Finland's triple-A rating to AA-plus.
Federal Reserve officials said over the weekend that a sharp slowdown in the global economy could delay an increase in U.S. interest rates.
"If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise," the U.S. central bank's vice chairman, Stanley Fischer, said.
The dollar index, which measures the greenback against a basket of currencies, was down 0.5 percent. The Japanese yen, often sought as a safe haven in uncertain times, gained 0.3 percent against the dollar, to 107.28, and the euro rose 0.4 percent to $1.2682.
"If the U.S. is not going to raise rates as aggressively as the market anticipated ... you can make the case for being short dollars," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. He said Germany's signs of weakness remained "a big concern."
Earlier this month, the dollar index hit its highest level since June 2010.
CRUDE PRICES UNDER PRESSURE
A combination of abundant supply and concerns about global demand has crushed crude oil prices in recent weeks. Brent crude futures last traded down 1.8 percent at $88.57, having touched $87.74, the lowest level since December 2010.
Kuwait said OPEC was unlikely to cut production to support prices, while Saudi Arabia has privately told oil market participants it could be comfortable with $80 oil.
"In light of these comments, one should not expect any OPEC output cuts before the Nov. 27 meeting," said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
Spot gold prices rose with the drop in the U.S. dollar, as worries about the global economy reduced investor appetite for risk. The sharp decline in oil prices, however, kept pressure on gold in the medium term as inflation expectations have gone down.
Gold rose to a near four-week high of $1,237.30 an ounce and last stood near $1,232, up 0.7 percent. Copper gained 1.4 percent, the most in three weeks, bolstered by the strong Chinese trade data.
(Additional reporting by Chuck Mikolajczak, Sam Forgione and Yasmeen Abutaleb in New York; Sam Wilkin in London; Editing by Nick Zieminski and Leslie Adler)
