Stocks and commodities slid as an unexpected drop in durable-goods orders spurred concern the U.S. economy is weakening as a stalemate over the debt ceiling pushed the government closer to default. The euro weakened while Spanish and Italian bonds dropped. The MSCI All-Country World Index lost 0.3 percent at 9:13 a.m. in New York and Standard & Poor’s 500 Index futures declined the same amount. The cost of insuring against default on Treasuries climbed to the highest since March 2009, and gold traded at a record $1,626.05 an ounce as investors sought haven assets. The Australian and New Zealand dollars reached all-time highs against the U.S. currency. Spain’s 10-year bond yield exceeded 6 percent for a third day. House Speaker John Boehner, battling resistance from within his own party as he intensifies a debt-ceiling standoff with President Barack Obama, worked to salvage his plan to tie the nation’s borrowing power to spending cuts and budget controls. U.S. index futures extended declines after a Commerce Department report showed durable goods orders fell 2.1 percent “The macro-economic situation shows signs of weakening and the earnings season is more cloudy than previous ones,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion. The decline in U.S. index futures indicated the S&P 500 may drop for a third day. Corning Inc. slid 4.3 percent after cutting its forecast for global glass demand. Amazon.com Inc. (AMZN), the world’s largest online retailer, jumped 5.8 percent in pre- market trading after sales and profit beat analysts’ estimates. Dow Chemical Co. and Boeing Co. reported better-than-expected earnings. ’Holding Period’ "We’re in a holding period until we get to the debt ceiling resolution," James Gaul, a money manager at Boston Advisors LLC in Boston, said in a telephone interview. His firm oversees about $1.8 billion. "Earnings reports are going to move individual stocks more than the overall market." More than two stocks fell for every one that gained in the Stoxx Europe 600 Index. Banco Santander SA, Spain’s biggest lender, said second-quarter profit dropped 38 percent as domestic loan provisions rose. UniCredit SpA, Italy’s largest lender, slid 4.4 percent. PSA Peugeot Citroen tumbled 8 percent as Europe’s second-biggest carmaker said its automotive unit may post a loss in the second half. Clariant AG sank 14 percent after the Swiss chemical maker reported profit that missed analysts’ estimates. Spanish Bonds The yield on the 10-year Spanish bond increased as much as 14 basis points to 6.106 percent, before trading four basis points higher at 6.002 percent. The yield on similar-maturity Italian bonds jumping as much as 18 basis points to 5.81 percent. Greek yields climbed four basis points. The yield on the benchmark German bund fell six basis points. Europe must prevent a breakup of the euro region and an “uncontrolled” exit of one of its members, German Finance Minister Wolfgang Schaeuble said in a letter to lawmakers. Schaeuble said Germany’s government is against a “blank check” for the euro-area rescue fund to purchase bonds on the secondary market. The Markit iTraxx SovX Western Europe Index of credit- default swaps insuring the debt of 15 governments rose 5.5 basis points to 265.5, according to CMA. Euro Retreats The 17-nation euro depreciated 0.5 percent against the yen and slid 0.4 percent versus the Swiss franc. The Australian dollar strengthened as much as 1.1 percent against the greenback to the most since it was floated in 1983 after a report showed consumer prices rose more in the second quarter than economists predicted. New Zealand’s dollar also climbed versus the U.S. currency to the highest level since it was freely floated in 1985 after a survey showed business confidence improved in July. The dollar declined 0.1 percent versus the yen. Credit- default swaps on the U.S. rose for a third day, climbing six basis points to 64. Gold for immediate delivery climbed as much as $6.75, or 0.4 percent in London. Silver for immediate delivery rose as much as 0.8 percent to $41.22 an ounce, the highest price since May 4. Oil slid 0.7 percent to $98.87 a barrel in New York. The MSCI Emerging Markets Index slipped 0.1 percent. China’s Shanghai Composite Index climbed for a second day, rising 0.8 percent after profit growth accelerated at industrial companies. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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