By Stephen Kirkland June 23 (Bloomberg) -- Stocks fell for a second day as U.S. housing data undermined confidence in the pace of the global economic recovery. Greek bonds dropped, driving the premium to German bunds to the widest in more than six weeks. The MSCI World Index of stocks in 24 developed nations lost 0.3 percent at 11:24 a.m. in London. Futures on the Standard & Poor’s 500 Index rose 0.6 percent after the U.S. benchmark index fell 1.6 percent yesterday. Copper futures in New York retreated for the first day this week, and oil declined for a second day. New home sales in the U.S. probably plunged by the most in 16 years in May, following an unexpected drop in sales of previously owned homes, economists said before today’s report. Growth in Europe’s services and manufacturing industries slowed in June, according to London-based based Markit Economics. “The outlook for the global economy is rapidly getting hazier,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. “Investors are becoming more inclined to avoid risk.” Seven stocks declined for every five that advanced in Europe, with the Stoxx Europe 600 Index slipping less than 0.1 percent. BHP Billiton Ltd., the world’s biggest mining company, lost 1.4 percent in London. Holcim Ltd. retreated 1.1 percent in Zurich as Morgan Stanley downgraded its recommendation on the second-largest cement maker. Greece’s ASE Index lost 1.7 percent, the biggest decline among 18 western European markets. A composite index based on a survey of euro-area purchasing managers in the service and manufacturing industries fell to 56 from 56.4 in May, according to Markit Economics. Economists forecast a drop to 55.8, the median of 13 estimates in a Bloomberg News survey showed. A reading above 50 indicates expansion. Paring Declines The gain in U.S. futures indicated the S&P 500 may pare some of yesterday’s decline, which was the biggest in almost three weeks. The benchmark index slipped below its average price over the last 200 days, a bearish signal to technical analysts. New-home sales, tabulated on contract signings, fell 19 percent to an annual pace of 410,000 last month, according to the median estimate of 76 economists surveyed by Bloomberg News before the Commerce Department report set for 10 a.m. in Washington. The MSCI Asia Pacific Index fell 1.1 percent, the biggest drop in two weeks. Toyota Motor Corp., which receives 67 percent of its revenue outside Japan, slid 1.7 percent in Tokyo. Nintendo Co., which counts the Americas and Europe as its biggest markets, dropped 3.6 percent. Emerging Markets The MSCI Emerging Markets Index dropped for a second day, declining 0.7 percent. China’s Shanghai Composite Index fell 0.7 percent after the government said it will remove export tax rebates on some steel and metals products, dragging down shares of producers including Baoshan Iron & Steel Co. Petroleo Brasileiro SA’s dropped to the equivalent of 28.65 reais in Frankfurt, down from the 29.11 reais closing price of the Sao Paulo-listed preferred shares yesterday. Latin America’s biggest company by market value delayed the sale of as much as $25 billion of stock until September because a price hasn’t been set in a related deal to buy oil reserves from the government. Rising yields on Greek government bonds pushed the European Union to create a 750 billion-euro ($921 billion) rescue fund to backstop the euro on May 10. Investors are being forced to sell Greek government bonds after Moody’s Investors Service downgraded its debt to below investment grade, or junk, on June 14, making the securities ineligible for some index-linked bond funds. Bond Charge European governments will consider imposing a charge on bond sales by countries that violate debt rules in the wake of the Greece-driven fiscal crisis, a draft document showed. Today’s decline in Greek bonds widened the premium over German bunds to 751 basis points, or 7.51 percentage points, the most since May 7. The so-called yield spread between Spanish and German 10-year bonds widened nine basis points to 191 basis points. The Portuguese-German spread grew 10 basis points to 303 basis points. Portugal plans to sell up to 800 million euros of 3.35 percent 2015 notes today. The cost of credit-default swaps insuring Greek government debt rose 22 basis points to 871.5, according to CMA DataVision. Treasuries were little changed ahead of the Federal Reserve policy makers meeting today and tomorrow. The Fed will keep interest rates near zero, according to a survey of economists by Bloomberg News. The yen strengthened against 12 of its 16 most-traded peers, adding 0.7 percent against the Taiwanese dollar and 0.6 percent versus the South Korean won. It was 0.1 percent stronger against both the dollar and the euro. Pound Gains The pound rose against the dollar and the euro as minutes of the Bank of England’s last meeting showed policy makers voted 7-1 to keep their benchmark interest rate at 0.5 percent and investors speculated Chancellor of the Exchequer George Osborne’s budget will help the U.K. keep its top credit rating without derailing the recovery. The British currency gain 0.5 percent to $1.4896 and 82.42 pence per euro. Copper for delivery in September fell 0.3 percent to $3.0015 a pound on the Comex in New York, and oil for August delivery was down 0.4 percent at $77.57 a barrel on the New York Mercantile Exchange. Gold jumped 0.4 percent to $1,245.50 an ounce, the second consecutive advance. ----With assistance from Matthew Brown, Claudia Carpenter, David Merritt and Michael Patterson in London and Shiyin Chen in Singapore and Anna Kitanaka in Tokyo. Editors: Stephen Kirkland, Paul Armstrong To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net;

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