By Stephen Kirkland Aug. 18 (Bloomberg) -- Government bonds rose, driving the 30-year German yield below 3 percent for the first time, on speculation economic growth is too anemic to fuel inflation. European stocks declined and U.S. index futures fluctuated. The yield on the 30-year bund slid as low as 2.98 percent, and the 10-year U.S. Treasury yield dropped to 2.61 percent, near the lowest in 17 months. The yen strengthened against all but two of its 16 most-traded peers. The Stoxx Europe 600 Index declined 0.2 percent at 7:45 a.m. in New York. Standard & Poor’s 500 Index futures slipped less than 0.1 percent. Oil fell 1.3 percent to $74.80 a barrel. “There is still concern on the strength of the recovery,” said Orlando Green, assistant director of capital-markets strategy at Credit Agricole Corporate & Investment Bank in London. The Federal Reserve may have to buy more assets if inflation keeps slowing, James Bullard, president of the Fed Bank of St. Louis, told the Wall Street Journal yesterday. The central bank announced its buying plans on Aug. 10, saying it would make the purchases using funds from principal payments of its holdings of mortgage-backed debt. European stocks fell for the first time in five days, with three stocks declining for every two that rose. Vestas Wind Systems A/S tumbled 20 percent after the world’s biggest wind- turbine maker lowered its sales forecast. $40 Billion Bid BHP Billiton Ltd. led mining shares lower after making a $40 billion hostile bid for Potash Corp. of Saskatchewan Inc. Shareholders yesterday rejected an initial approach at the same price because it was “grossly inadequate.” Credit-default swaps insuring BHP’s debt rose 19.5 basis points to 100.5, according to data provider CMA. A.P. Moeller-Maersk A/S, owner of the world’s largest container-shipping line, fell 1.1 percent after saying freight rates will be lower in the fourth quarter. The S&P 500 rose 1.2 percent yesterday, its biggest gain in more than two weeks. Out of the 445 companies in the benchmark index to have reported second-quarter earnings since July 12, 75 percent have topped analysts’ earnings estimates, according to data compiled by Bloomberg. Deere & Co. reported a third-quarter profit of $1.44 a share, compared with the average estimate of $1.22 in a Bloomberg survey. Target Corp., the second-largest U.S. discount retailer, had second-quarter profit of 92 cents a share, matching the estimate in a Bloomberg survey. German 30-year government bond yields fell as the nation sold 5 billion euros ($6.4 billion) of 10-year debt, indicating this year’s rally in the securities hasn’t damped demand. An index of global sovereign bonds has returned 5.7 percent in 2010, according to Bank of America Merrill Lynch. The MSCI World Index of shares handed investors a 2.4 percent loss after accounting for reinvested dividends. An emerging “bubble” in sovereign debt is yet to peak because individual investors no longer trust equities, according to Julius Baer Group Ltd. Baby Boomers “The baby-boomer generation, after being hurt twice with equities, and having a shorter investment time horizon, are simply buying bonds like there’s no tomorrow, and yields may stay low for the next two to three years,” Christian Gattiker, head of research at Bank Julius Baer in Zurich, said on ‘‘Start Up” with Maryam Nemazee on Bloomberg Television today. The yen gained 0.2 percent to 109.99 per euro, while the euro slipped 0.1 percent to $1.2872. The Swiss franc strengthened 0.3 percent to 1.3407 per euro and appreciated 0.2 percent against the dollar to 1.0417. Oil declined after the American Petroleum Institute reported yesterday that the country’s crude stockpile increased by 5.87 million barrels last week. The U.S. Energy Department will issue its own data later today. Copper for delivery in three months fell 0.3 percent to $7,359 a metric ton on the London Metal Exchange, declining for the first time in three days. Aluminum, nickel, tin and zinc also dropped. Gold for immediate delivery sank 0.2 percent to $1,222.73 an ounce. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net

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