BASE METALS: Copper Falls on Demand Worry After China Data, Fed - Wall Street Journal

--Comex July copper settles down 8.95 cents, or 2.6%, at $3.298 a pound

--China manufacturing data show continued contraction, outweighs rise in imports

--Federal Reserve policy statement acknowledges challenges to U.S. growth

        By Matt Day      

NEW YORK--Copper futures fell to their lowest point in almost two weeks Thursday, as worries about the health of the manufacturing sector in top consumer China and a lack of a new Federal Reserve boost to the U.S. economy hit the demand outlook for the industrial metal.

The most-actively traded copper contract, for July delivery, fell 8.95 cents, or 2.6%, to settle at $3.298 a pound on the Comex division of the New York Mercantile Exchange, the lowest settlement price since June 8.

"Poor headlines have been coming at us all day today," said Edward Meir, an analyst with INTL FCStone.

A preliminary gauge of China's manufacturing activity showed the sector's contraction accelerating this month. A purchasing managers index maintained by HSBC fell to 48.1 in June, from 48.4 in May. Readings below 50 indicate contraction from the previous month.

"The data adds to the sense that China's economy continues to limp along," Leon Westgate, an analyst with Standard Bank, said in a note.

China accounts for about 40% of world copper consumption, making copper prices particularly sensitive to shifts in the country's economy. Copper is used in a wide range of applications in construction and manufacturing, including home appliances, power cables, plumbing and consumer-electronics products.

U.S. data also missed expectations, with the Federal Reserve Bank of Philadelphia reporting a sharp deterioration in business conditions for Mid-Atlantic manufacturers last month.

Earlier, data showed that the number of Americans filing for jobless benefits fell slightly last week, though the prior week's figure was revised higher, indicating the labor market is struggling to avoid stalling.

The copper market was already on its heels ahead of the gloomy economic data, after the Fed disappointed some market participants when it didn't disclose new programs to prop up the U.S. economy.

While the central bank extended its current program of shifting its portfolio in an effort to keep borrowing costs down, some investors had hoped for more after economic reports this spring suggested that growth in the U.S. was flagging.

In a statement Wednesday, the Fed's policy-making committee acknowledged rising risks to U.S. and global growth.

"Base metal prices continue to experience headwinds from deepening European debt crisis and an economic slowdown in China," analysts with National Australia Bank said in a note. "News out of the U.S., which has been one of the few sources of support over recent months, has underperformed market expectations."

     Copper settlements (ranges include electronic and pit trading):   Jun $3.2950; down 9.15 cents; Range $3.32950-$3.3610   Jul $3.2980; down 8.95 cents; Range $3.32950-$3.3610      

-Francesca Freeman contributed to this article.

Write to Matt Day at matt.day@dowjones.com.