By Stuart Wallace May 14 (Bloomberg) -- Stocks fell around the world and the euro slid to an almost 19-month low against the dollar on concern the sovereign debt crisis will limit growth and lead to a breakup of the shared European currency. Oil retreated for a fourth day and U.S. and German bonds rallied. The Standard & Poor’s 500 Index declined 1 percent at 9:36 a.m. in New York, the Stoxx Europe 600 Index slumped 2.1 percent and the MSCI Asia Pacific Index tumbled 1.1 percent. Crude oil retreated 1.4 percent and copper dropped 2.1 percent as the euro weakened below $1.25 to levels not seen since November 2008. The yield on the 10-year German bund decreased 7 basis points, while the 10-year Treasury yield lost 6 basis points to 3.47 percent. The cost of insuring against a default by Greece rose and gold advanced to a record. Deutsche Bank AG Chief Executive Officer Josef Ackermann said Greece may not be able to repay its debt in full, and former Federal Reserve Chairman Paul Volcker said he’s concerned the euro area may break up. Sony Corp., the world’s second- largest maker of consumer electronics, said it may suffer a “significant impact” if Europe’s deficit spreads, while Chinese Premier Wen Jiabao said the foundations for a worldwide recovery aren’t “solid” as the sovereign-debt crisis deepens. “Euro-phoria has faded fast,” Ian Williams, U.K. strategist at Altium Securities in London, wrote in a note to clients. “The symptoms of the region’s problems had to be addressed quickly, but the causes are very deep-seated, and through the week growing acknowledgement of the inevitable impact of austerity packages on the outlook for growth has driven the euro lower.” Weekly Gain Trimmed The S&P 500 extended yesterday’s 1.2 percent slump and trimmed its weekly rally to 3.5 percent, the biggest since October. American Express Co., JPMorgan Chase & Co. and Intel Corp. fell at least 1.7 percent to lead declines in the Dow Jones Industrial Average. U.S. stock-index futures remained lower before the open of exchanges in New York even after U.S. retail sales climbed in April for a seventh straight month. Purchases increased 0.4 percent last month, exceeding the median estimate of economists surveyed by Bloomberg News, after a 2.1 percent gain in March that was larger than previously estimated, the Commerce Department said. The Stoxx 600 pared its weekly advance to 6.6 percent, still the biggest gain since July. The gauge rallied 7.2 percent on May 10 after the European Union unveiled a 750 billion-euro ($938 billion) financial assistance package for indebted countries. European Stocks Banks and basic resources stocks led declines among the 19 industry groups in the Stoxx 600. Xstrata Plc, the world’s fourth-largest copper producer, slumped 5 percent in London. Banks tumbled as Credit Suisse Group AG forecast new regulation may cost the industry 244 billion euros. Banco Santander SA, Spain’s biggest lender, tumbled 4.8 percent in Madrid. Barclays Plc fell 3.7 percent in London. Saras SpA declined 4.3 percent in Milan after the Italian oil refiner swung to loss in the first quarter. The yield on the bund fell six basis points to 2.88 percent, and the two-year German note yield declined five basis points to 0.55 percent. Greek 10-year bonds dropped, with the yield climbing 41 basis points to 7.77 percent. The euro slid as much as 0.8 percent to $1.2433, the lowest level since Nov. 21, 2008. Credit-default swaps on Greek debt climbed 59.5 basis points to 588.5, according to CMA DataVision prices. China Lacks Buyers China failed to draw enough bids at a treasury bill sale for a second time in a month on speculation banks are seeking higher returns in longer-maturity debt. The finance ministry sold 17.4 billion yuan ($2.5 billion) of the 20 billion yuan of 273-day securities on offer at an average yield of 1.72 percent, compared with 1.54 percent at the last sale, according to data compiled by Bloomberg. China didn’t complete sales of 273-day and 91-day debt on April 9. Crude oil for June delivery fell 1.4 percent to $73.38 a barrel in New York trading, taking its four-day slump to 4.3 percent. Refiners must be ready for oil prices to rebound to more than $100 a barrel on growing consumption in Asia, Mukesh Ambani, Asia’s richest man and chairman of Reliance Industries Ltd., said at a conference in Mumbai today. Copper for delivery in three months dropped 2.1 percent to $7,010 a metric ton on the London Metal Exchange, leading a decline in industrial metals. Gold for immediate delivery rose 1.2 percent to a record $1,246.85 an ounce. Asian stocks fell for a third day. Sony plummeted 6.8 in Tokyo. Toyota Motor Corp., a Japanese carmaker that gets about 70 percent of its sales abroad, dropped 1.9 percent. Commonwealth Bank of Australia led financial shares lower, falling 2.2 percent in Sydney. Turkey ‘Contagion Risk’ The MSCI Emerging Markets Index dropped 1 percent, paring its weekly rally to 4.2 percent. Turkey’s ISE National 100 Index fell 2 percent, the largest decline among major emerging markets, after Credit Suisse advised reducing stock holdings in the country in part because of “contagion risk” from indebted European nations. Poland’s zloty and the Hungarian forint weakened 0.8 percent against the euro, leading declines in developing-nation currencies. To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net

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