Stocks in Europe and copper dropped for the first time in five days after European Central Bank President Jean-Claude Trichet said the debt crisis threatens the financial system. Treasuries declined, while emerging-market stocks extended their longest rally since 2009. The Stoxx Europe 600 Index slid 0.7 percent at 8:10 a.m. in New York. Standard & Poor’s 500 Index futures fell 0.6 percent, after the U.S. stocks gauge jumped the most since August yesterday. The yield on the 10-year U.S. Treasury note rose eight basis points and the German 10-year bund yield slipped one basis point. Copper declined 3.3 percent in London after surging 10 percent in four days.. The crisis has reached a “systemic dimension,” Trichet said today, as Slovakia, the only country in the region that hasn’t ratified the retooled bailout fund, prepared to vote on the package. International inspectors said Greece has made progress toward closing its budget gap and is likely to receive its next tranche of rescue funds in early November. Alcoa Inc. (AA) will be the first Dow Jones Industrial Average company to report results today for a quarter that’s forecast to show the slowest growth in corporate profits since the end of 2009. “The markets would find any excuse to see a little bit of a setback,” said Robert Buckland, head of global equity strategy at Citigroup Inc. in London. “The ECB wants the politicians to make the tough decisions and the stock market wants the tough decisions to made.” Stoxx 600 About two shares retreated for every one that advanced in the Stoxx 600. The index rallied 8.5 percent in four days through yesterday, the most since November 2008. The decline in S&P 500 futures followed the gauge’s 3.4 percent gain yesterday and an 8.7 percent rebound since Oct. 3. Alcoa, the biggest U.S. aluminum producer, may say today after U.S. markets close that profit was 23 cents a share, compared with 9 cents a year earlier, according to the average estimate in a Bloomberg News survey of 15 analysts. S&P 500 earnings, excluding financial companies, are forecast to have increased 14 percent for the third quarter, the smallest gain since the end of 2009, analysts’ estimates compiled by Bloomberg show. “You’re getting more profit warnings because the economic news has been dire for several months now,” said Ian Murrell, an analyst at Pritchard Stockbrokers Ltd. in London who correctly forecast last year’s gain in U.K. stocks and gold’s increase to a record this year. “The two main props to equity markets in recent years have been quantitative easing and decent corporate results. With the weaker economy that we’re seeing, sooner or later that’s going to impact corporate profits.” Bondholder Writedown Greek 10-year bonds pared losses, with the 10-year yield up 40 basis points at 24.31 percent after climbing as much as 76 basis points. A European Union, International Monetary Fund and European Central Bank team of inspectors, known as the troika, said Greece has overall made important progress in fiscal consolidation, according to an e-mailed statement from the European Commission’s offices in Athens on completion of a review of the country’s economy. The success of the program depends on continued private sector involvement, the statement said. Once the Eurogroup and the IMF’s Executive Board have approved the conclusions of the fifth review, the next tranche of 8 billion euros will become available, most likely, in early November, the statement said. Greek Haircuts Luxembourg’s Prime Minister Jean-Claude Juncker, who leads the group of euro-area finance ministers, said Greek bondholders may need to take a writedown of more than 60 percent on the nation’s debt. His spokesman, Guy Schuller, later said he meant that haircuts could exceed the 21 percent already agreed in July. The yield on the two-year German note declined two basis point. The Italian two-year note yield rose one basis points even as borrowing costs fell and demand climbed at a sale of 9.5 billion euros ($12.9 billion) of 74- and 367-day bills. Greece auctioned 1.3 billion euros of 186-day securities, while the Netherlands issued 2.7 billion euros of 2017 notes. U.S. three-year note yields climbed for a fifth day before an auction of $32 billion of the securities. The Treasury is scheduled to offer 10-year debt tomorrow and 30-year bonds in two days. Treasuries didn’t trade yesterday because of a holiday. The euro weakened 0.3 percent to $1.3607. U.K. Manufacturing The 17-nation currency depreciated 0.3 percent versus the yen. Sterling fell 0.2 percent to $1.5639 after a report showed U.K. manufacturing slid more than economists forecast in August, adding to signs that the recovery continued to struggle in the third quarter. Factory output fell 0.3 percent from July, when it declined a revised 0.2 percent, the Office for National Statistics said today in London. The median forecast of 24 economists in a Bloomberg News survey was for manufacturing to fall 0.2 percent. The MSCI Emerging Markets Index climbed 0.8 percent, driving the benchmark index to its steepest five-day gain since 2009. The Hang Seng China Enterprise Index of Chinese companies traded in Hong Kong jumped 4.4 percent after the Chinese state investment fund bought shares in four banks. The Taiex Index surged 2.6 percent after a holiday in Taiwan yesterday, while South Korea’s Kospi Index (KOSPI) climbed 1.6 percent to a three-week high. Russia’s Micex Index slid 1.6 percent after jumping 9.1 percent in the past three sessions. Japan Swaps Credit-default swaps insuring Japanese government debt tumbled 15 basis points to 108.5, according to CMA, completing the biggest four-day decline since 2004. The contracts reached a record 154.8 basis points on Oct. 4. Copper declined 3.3 percent to $7,245.75 a metric ton on the London Metal Exchange, after rising 10 percent in the past four days. Oil pared losses and was down 0.6 percent after losing as much as 1.3 percent in New York to $84.27 a barrel. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net

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