BS: Euro Falls on Greek Debt Concern as U.S. Stocks Gain on Job Data
By Daniel Tilles
Feb. 2 (Bloomberg) -- The euro fell as Greece struggled to reach a deal with bondholders on cutting the nation’s debt, while Spanish bonds slid after the nation sold securities. U.S. stocks rose following a drop in jobless claims and European equities advanced as Xstrata Plc confirmed takeover talks.
The euro slipped 0.2 percent to $1.3135 at 9:30 a.m. New York time and weakened against 13 of 16 major peers. The Standard & Poor’s 500 Index added 0.2 percent and the Stoxx Europe 600 Index rose 0.3 percent. The yield on the Spanish 10- year bond climbed 10 basis points, while the German bund yield fell two basis points. U.S. 10-year note yields were little changed at 1.83 percent. Oil dropped 0.8 percent to $96.82 a barrel as 18 of 24 commodities in the S&P GSCI Index declined.
U.S. stocks rose for a second day as applications for unemployment insurance payments dropped by 12,000 to 367,000 last week, bolstering optimism in the economy a day before the government’s monthly employment report. Luxembourg Prime Minister Jean-Claude Juncker said Greek bond-swap talks with private creditors are “ultra-difficult.” Greece will default on its debt and is likely to leave the euro, Nobel economics laureate Paul Krugman said at a conference in Moscow today.
“There’s a growing fatigue in the market over the Greek deal,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “For weeks we’ve been hearing a deal is imminent and the market went risk-on yesterday in expectation there was going to be an agreement. This has failed to materialize and I sense the market is becoming a bit weary with the euro.”
Spanish Auction
The 17-nation euro depreciated 0.4 percent against the yen and 0.2 percent versus the pound. Spain sold 4.56 billion euros of bonds maturing in 2015, 2016 and 2017, just above its target for the sale.
The French 10-year yield fell 12 basis points after the government auctioned 7.962 billion euros of securities, including debt due in April 2022. The yield on the German 10- year bund declined for the sixth time in the past seven days.
The Stoxx 600 is trading at a six-month high. Shares of Xstrata Plc jumped 9.8 percent as the miner said Glencore International Plc offered to buy the shares it didn’t already own. Glencore advanced 6.7 percent. Joining the two natural resources companies would combine the world’s largest listed commodity trader with a producer of coal, copper and nickel from Africa to Asia.
Deutsche Bank AG slid 1.2 percent as Germany’s largest bank said earnings dropped 76 percent in the fourth quarter. Unilever NV, the world’s second-biggest consumer-goods maker, sank 4.4 percent in London.
Glencore, Xstrata
U.S. stocks yesterday halted a four-day retreat, the longest for the Dow Jones Industrial Average since August. Tomorrow’s monthly payrolls data is forecast to show employment grew by 145,000 last month after rising 200,000 in December and the jobless rate held at an almost three-year low of 8.5 percent, according to a Bloomberg survey of economists.
Facebook Inc., the social-networking website that began about eight years ago in a Harvard University dorm, filed to raise $5 billion in an initial public offering in what would be the largest Internet IPO on record. The company, which now boasts more than 800 million users, didn’t specify the number or price of shares it will offer.
Copper dropped 0.9 percent to $3.8080 a pound as aluminum retreated 1.3 percent to $2,235 a ton on the London Metal Exchange. The S&P GSCI gauge of 24 commodities fell 0.5 percent.
The MSCI Emerging Markets Index climbed 1.2 percent, heading for the highest close since Aug. 4. The Shanghai Composite Index gained 2 percent. Vietnam’s benchmark VN Index jumped 2.8 percent to 401.61 amid speculation policy makers will implement more measures to support the market. Benchmark indexes gained more than 1 percent in South Korea and Taiwan, and rose 0.6 percent in South Africa and 0.8 percent in Hungary.
--With assistance from Lynn Thomasson in Hong Kong, Norie Kuboyama in Tokyo, John Buckley in Amsterdam and David Goodman, Alexis Xydias, Claudia Carpenter, Jason Webb, Andrew Rummer and Paul Armstrong in London. Editor: Michael P. Regan
To contact the reporter on this story: Daniel Tilles in London at dtilles@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
