Global stocks tumbled the most since November and commodities fell as a report signaled the euro- area’s economy contracted more than forecast and concern grew that the U.S. Federal Reserve may slow the pace of stimulus. The euro weakened while German bunds rose with Treasuries.
The MSCI All-Country World Index of equities lost 1.3 percent and emerging-market stocks erased this year’s gains. The Standard & Poor’s Index fell 0.6 percent after the gauge sank 1.2 percent yesterday, the most in three months. The S&P GSCI Index of 24 raw materials retreated 1.6 percent to a one-month low as oil settled at its lowest price of the year. The euro declined 0.7 percent to $1.3185. U.S. 10-year yields slipped four basis points to 1.97 percent as Germany’s 10-year rate slipped eight basis points.
A report on the euro-area’s economy signaled the region is struggling to recover from a recession, while U.S. data showed jobless claims rose more than forecast and Philadelphia-area manufacturing unexpectedly shrank. Fed policy makers said the central bank should be ready to vary the pace of its $85 billion in monthly bond purchases, minutes from the last policy meeting showed yesterday, spurring concern stimulus will be curtailed.
“We have a hangover from the minutes yesterday,” Joe Heider, Cleveland-based principal for Rehmann Financial Group, which oversees $2.2 billion in assets, said in a phone interview. “But I don’t think it’s a long-term trend.”
The S&P 500 dropped from a five-year high yesterday after rising 7.3 percent since the beginning of the year through Feb. 19. Indexes of commodity, technology, financial and industrial companies lost at least 0.9 percent to lead declines in eight of the 10 main industry groups in the S&P 500 today. Intel Corp., Caterpillar Inc., Home Depot Inc. and Bank of America Corp. fell at least 1.8 percent for the biggest losses in the Dow Jones Industrial Average, which slipped 46.92 points to 13,880.62.
Wal-Mart Stores Inc. (WMT:US), the world’s largest retailer, rose 1.5 percent as its dividend increase overshadowed a first- quarter profit forecast that trailed analysts’ estimates. Hewlett-Packard Co. rose 2.4 percent before reporting earnings after the close of trading. The shares added another 7.9 percent in extended trading as the company’s fiscal first-quarter revenue and earnings, as well as its second-quarter profit forecast, beat analyst estimates, suggesting Chief Executive Officer Meg Whitman is making progress turning the computer maker around.
U.S. jobless claims increased by 20,000 to 362,000 in the week ended Feb. 16, the Labor Department reported today. The median forecast of 48 economists surveyed by Bloomberg called for an increase to 355,000. The Federal Reserve Bank of Philadelphia’s general economic index dropped to minus 12.5, trailing the median estimate for a reading of 1.
The Conference Board’s index of U.S. leading indicators for January increased 0.2 percent, matching the median economist estimates. Another report from the National Association of Realtors showed sales of previously owned U.S. homes increased 0.4 percent in January, beating the median forecast for a 0.8 percent decrease.
The Stoxx Europe 600 Index (SXXP) sank 1.5 percent, the most in two weeks. The volume of shares changing hands in companies listed on benchmark gauges in the U.K., Germany and France was at least 15 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
A composite gauge of euro-area services and manufacturing output dropped to 47.3 from 48.6 in January, London-based Markit Economics said today,
Industries most reliant on economic growth for revenue led losses, with Akzo Nobel NV, the world’s largest paintmaker, sinking 3 percent and BHP Billiton Ltd., the biggest mining company, sliding 4 percent.
Axa SA fell 3.1 percent after Europe’s second-largest insurer reported profit that missed analysts’ estimates. BAE Systems Plc rallied 4.1 percent, the most in five months, as the region’s largest arms maker announced a 1 billion-pound ($1.5 billion) buyback program and posted profit topped projections.
The euro fell against 12 of its 16 major counterparts, losing 1.3 percent versus the yen. The Dollar Index, which measures the U.S. currency against six trading partners, gained as much as 0.5 percent to 81.508, the highest level since Sept. 5.
Spanish 10-year bonds trimmed declines after the government sold more debt than targeted at an auction. The yield was up one basis points at 5.20 percent after climbing as much as six basis points to 5.24 percent. Spain sold 4.23 billion euros ($5.58 billion) of bonds, more than its maximum target of 4 billion euros.
Nickel dropped 3.1 percent and copper fell 1.2 percent as 21 of 24 commodities in the S&P GSCI Index retreated, sending the gauge down the most in three months. West Texas Intermediate oil fell 2.5 percent to $92.84 a barrel, the lowest settlement since Dec. 31.
The MSCI Emerging Markets Index (MXEF) sank 1.4 percent to the lowest since Dec. 27. The Shanghai Composite Index retreated 3 percent and the CSI 300 tumbled 3.4 percent, the most since August 2011. China’s government told local authorities to curb real estate speculation, according to a statement yesterday. Benchmark gauges in Russia, India, South Africa, Hungary, the Czech Republic and Thailand lost at least 1 percent.
Emerging-market stocks may enter a “significant correction” after they trailed developed-nation shares this year, JPMorgan & Chase Co. said in a report dated yesterday. The MSCI gauge for developed countries has advanced 4.3 percent this year.
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