By Rita Nazareth and Jeff Kearns May 4 (Bloomberg) -- The euro slid to a one-year low, while stocks and U.S. futures slumped, amid concern the European government debt crisis is spreading to Spain and Portugal. Commodities and shares of their producers fell on a slowdown in Chinese manufacturing and fallout from the BP Plc rig disaster. The euro weakened against 13 of its 16 major counterparts and dropped below $1.31 for the first time since April 2009. The MSCI World Index of 23 developed nations’ stocks declined 0.8 percent at 8:55 a.m. in New York and the Stoxx 600 Basic Resource Index slid 3.8percent. Futures on the Standard & Poor’s 500 Index dropped 0.8 percent. BP Plc slumped to a seven-month low as the costs of containing an oil spill in the Gulf of Mexico mounted. Copper fell to its lowest level in nine weeks. Greece’s 110 billion-euro ($146 billion) bailout, approved by finance ministers over the weekend, is failing to ease speculation the debt crisis will spread to nations such as Portugal and Spain. A Chinese purchasing managers’ index declined to 55.4 from 57 in March, signaling government attempts to cool the world’s fastest-growing economy are working. “There’s spillover effect from China,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which manages $9 billion. “Spain and Portugal are both endangered species. The attention could shift to one of those countries. In the U.S., it’s no longer news that earnings are better than expected. The stock market has had a great run. I’ve got a feeling that May is going to be a month of consolidation or even of backing down a little bit.” Futures Slide The decline in U.S. futures indicated the S&P 500 may pare yesterday’s 1.3 percent rally triggered after Warren Buffett defended Goldman Sachs Group Inc. in the wake of fraud accusations against the firm, while reports on manufacturing and consumer spending signaled the economy is strengthening. A report from the National Association of Realtors today may show more Americans signed contracts to buy previously owned homes in March. Data may also show factory orders fell as a slump in aircraft demand masked gains in business equipment and machinery. The Stoxx Europe 600 Index slumped 1.3 percent as all 18 western European markets declined. Spain’s IBEX 35 tumbled 3 percent as Banco Santander SA, the nation’s biggest lender, fell 4.5 percent in Madrid. S&P last week cut Greece’s credit rating to the junk level of BB+, lowered Spain by one level to AA and cut Portugal by two steps to A-. The downgrades last week helped drive the yield premium on Portugal’s 10-year bonds over similar-maturity German notes to the highest level since at least 1997 and that for Spain’s debt to the most since March 2009. ‘Biggest Concern’ “The biggest concern today remains the European peripheral countries and Spain is the big one because there’s fear of another downgrade,” said Sal Catrini, a managing director for equities at Cantor Fitzgerald & Co. in New York. “That’s shaking things up today.” BP Plc tumbled as much as 5.3 percent. The shares are down about 16 percent since an explosion last month on a rig it leased in the Gulf of Mexico threatened to flood the U.S. coastline with oil, wiping about 20 billion pounds ($30.3 billion) off the London-based company’s market value. BHP Billiton Ltd. and Rio Tinto Group slumped more than 4 percent on the first trading day in London since the Australian government unveiled plans to impose heavier taxes on mining companies. The MSCI Asia Pacific Index fell 0.5 percent to a five-week low. China Zhongwang Holdings Ltd., a maker of aluminum products, slid 4.5 percent in Hong Kong. Yanzhou Coal Mining Co., a Chinese energy company that paid more than $3 billion for Australia’s Felix Resources Ltd., fell 2.9 percent. Greek Bonds Fall Greek bonds fell for the first time in four days, with the yield on the government’s 10-year bond rising 42 basis points to 8.92 percent. Investors demanded an extra 592 basis points to hold Greek 10-year bonds instead of benchmark German bunds, up from 544 basis points yesterday. Credit-default swaps on Greek debt rose 34.5 basis points to 681, according to CMA DataVision prices. “The crisis in Greece has escalated significantly in recent days,” said Tristan Hanson, manager of asset allocation and strategy at Ashburton Ltd. in Jersey, Channel Islands. “Confidence in the long-term solvency of the Greek government has collapsed. As ever, from a global financial markets perspective, the big risk remains contagion.” The yen strengthened against 15 of its 16 most-traded counterparts, appreciating 0.8 percent versus the euro. The Australian dollar weakened against all but one of its 16 most-traded peers, losing 1.1 percent against the dollar, after the central bank signaled it may slow the pace of interest-rate increases after raising borrowing costs for the sixth time in seven meetings today. Copper, Aluminum Copper for delivery in three months fell as much as 3.6 percent to $7,162.50 a metric ton on the London Metal Exchange, the lowest since Feb. 26. Aluminum dropped 2.3 percent, the first decline in four days. Crude oil retreated 1.5 percent to $84.92 a barrel in New York trading, on speculation U.S. crude supplies increased last week. Thailand’s SET Index advanced 4.4 percent, the most in two weeks, and the baht strengthened after Prime Minister Abhisit Vejjajiva proposed a November election to help end the country’s worst political violence in 18 years. The Shanghai Composite Index dropped 1.2 percent after China’s central bank ordered a third increase in banks’ reserve requirements this year and manufacturing growth slowed. To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Jeff Kearns in New York at jkearns3@bloomberg.net.

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