SAO PAULO, March 4 (Reuters) - Brazilian stocks fell onThursday for a second straight session, giving up early gainsafter weak U.S. home sales data pushed down oil futures andhelped lift the dollar.
U.S. pending home sales unexpectedly dropped 7.6 percent,surprising markets which had expected a 1 percent increase, andwiping out confidence that followed some positive readings inretail sales and jobless claims data.
Investors in Brazil have become more U.S. data-dependent,as developments in equity markets there are seen as a gauge ofrisk-taking and global confidence.
"The response from the Brazilian market was quick becausethe Bovespa had risen more than foreign markets," said BernardoRodarte of Sita Corretora. "When they saw the negative number,foreign investors took advantage of the moment to pocket recentgains."
The benchmark Bovespa index .BVSP fell 0.6 percent to67,238 points in early afternoon trading followingprofit-taking in the previous session. The country"s currency,the real (BRBY), edged down 0.1 percent to 1.792 per dollar.
The dollar strengthened against the euro and a basket ofmajor currencies, pushing commodities prices lower. Thebenchmark Reuters-Jefferies index .CRB slumped 1.11 percent.
The weak U.S. home sales numbers also weighed on optimismover a resolution to a growing debt problems brewing in theeuro zone.
Debt-burdened Greece drew strong demand for a crucial bondissue on Thursday but paid a steep risk premium. The problemsin Greece have exposed strains within the euro zone and roiledmarkets in recent weeks, particularly hitting riskier assets.
State-controlled energy giant Petrobras (PETR4.SA), themost heavily-weighted stock in the index, was off 0.48 percentto 34.98 reais.
Mining company Vale (VALE5.SA) (VALE.N), the world"slargest iron ore trader, slipped 0.07 percent to 45.31 reais.
Grupo Pao de Acucar (PCAR5.SA), Brazil"s largestdiversified retail group, said same-store sales should riseclose to 15 percent this year, the company"s CEO said on aconference call with analysts.
Brazil"s automobile output jumped 23.9 percent in Februaryfrom a year earlier while January industrial productionincreased at its fastest year-on-year pace in 15 years,underscoring expectations of a strong rebound in LatinAmerica"s largest economy.
Steelmakers also fell. Gerdau (GGBR4.SA) shed 0.22 percentto 26.66 reais, Usiminas (USIM5.SA) moved down 0.54 percent to51.11 reais and CSN (CSNA3.SA) slipped 1.26 percent to 59.79reais.
Yields on Brazilian interest rate futures contracts<0#DIJ:> ticked slightly lower.
The yield on the contract due January 2011 DIJF1 edgeddown to 10.45 percent. The yield on the contract due January2012 DIJF2 fell to 11.61 percent from 11.63 percent.
Investors use the contracts to bet on trends in thecountry"s benchmark interest rate, the Selic, currently at arecord-low 8.75 percent.
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