U.S. Stocks Fall as Euro Weakens, 10-Year Treasuries Pare Loss
May 26 (Bloomberg) -- U.S. stocks fell, halting a global advance, and the euro weakened as reports that China may review investments in European government bonds spurred concern the credit crisis will worsen.
The Dow Jones Industrial Average lost 0.7 percent, dropping below 10,000 for the first time since February. The Stoxx Europe 600 Index rose 2.4 percent and the MSCI Asia Pacific Index added 0.9 percent. The euro dropped to $1.2169 at 5:23 p.m. in New York, sinking toward the four-year low of $1.2144 reached last week. Treasuries pared losses, with yields on 10-year notes at 3.19 percent versus 3.26 percent earlier.
China’s State Administration of Foreign Exchange has met with foreign bankers because of concern about exposure to Europe, the Financial Times reported without saying where it got the information.
China Investment Corp., the nation’s sovereign wealth fund, may lower its allocation of assets to Europe, Reuters said, citing President Gao Xiqing.
U.S. stocks gained earlier as new-home sales rose to the highest in two years and durable-goods orders beat forecasts.
“People are scratching their heads,” said Mark Bronzo, an Irvington, New York-based fund manager at Security Global Investors, which oversees $23 billion. “
We had good economic data points, but that did not help. We couldn’t sustain the gains. People are on the sidelines. There are too many uncertainties about Europe.”
10% Retreat
The Standard & Poor’s 500 index is down 10 percent in May, poised for its worst month since February 2009 as credit-ratings downgrades of Greece, Portugal and Spain added to concern some European nations will struggle to fund budget deficits.
Microsoft Corp. tumbled 4.1 percent today in New York after Chief Executive Officer Steve Ballmer said the effects of the debt crisis won’t be isolated to Europe. Wells Fargo & Co. and Goldman Sachs Group Inc. slid at least 1.6 percent as financial shares in the S&P 500 reversed a 1.8 percent increase. The stock indexes erased gains as the euro dropped below $1.22.
The “euro has been trading terribly,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, said in an e-mail. “Once euro broke the 1.22 level, selling picked up in everything else.”
The MSCI World Index of shares in 24 developed nations climbed 0.5 percent. It posted an advance of 2 percent an hour after U.S. stock exchanges opened before retreating.
The euro fell against 14 of 16 major counterparts, including losses exceeding 1.5 percent versus the South African rand, the Japanese yen and the Singapore dollar. The Dollar Index, which measures the U.S. currency against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, rallied 0.6 percent in its third straight advance.
The Reuters/Jefferies CRB Index of commodities rose 1.6 percent. Oil advanced 4 percent, the most since September, to $71.51 a barrel in New York after a U.S. government report showed gains in fuel consumption. Demand climbed 0.6 percent to 19.7 million barrels a day in the week ended May 21, the Energy Department said in a report today.
To contact the reporters on this story: Nick Baker in New York at
nbaker7@bloomberg.net; Rita Nazareth in New York at
rnazareth@bloomberg.net.
Last Updated: May 26, 2010 17:31 EDT
respecto a Europa y
para el dow y nuestra renta fija neutra.
