Brazil Stocks Fall, Led by Vale, on Falling Commodity Prices

By Paulo Winterstein

Sept. 1 (Bloomberg) -- Brazilian stocks fell for a second day, led by commodity producers, as metal and oil prices dropped on speculation global growth will slow.

Cia. Vale do Rio Doce slid as nickel, which last year accounted for about one-third of revenue, dropped 3.1 percent in London. Steelmakers fell, led by Gerdau SA and Usinas Siderurgicas de Minas Gerais SA. State-controlled oil company Petroleo Brasileiro SA declined as crude prices retreated on easing concern about the damage Hurricane Gustav will inflict on drilling rigs and refineries.

The Bovespa dropped 539.49, or 1 percent, to 55,140.92 at 9:22 a.m. New York time. The MSCI Latin America index lost 1.1 percent. U.S. markets were closed for the Labor Day holiday, while stocks in Europe and Asia declined.

Vale, the world's biggest iron-ore producer, fell 1.8 percent to 37.30 reais.

Gerdau, Latin America's largest steelmaker, dropped 1.8 percent to 30.15 reais. Usiminas, as the second-biggest steelmaker is known, fell 1.2 percent to 56.49 reais.

Petrobras slumped 1.4 percent to 34.42 reais. Oil declined as much as $1.85 a barrel in New York, reversing earlier gains, after Hurricane Gustav failed to gain strength before striking the Louisiana coast.

To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.