BLBG: Stocks Fall for Third Day as Treasuries, Dollar Advance
U.S. and European stocks fell for a third day, while Treasuries, the dollar and yen rose, as Standard & Poor’s said Greece may have to restructure its debt again and concern grew about China’s economy.
The Standard & Poor’s 500 Index declined 0.4 percent at 9:30 a.m. and the Stoxx Europe 600 Index (SXXP) lost 1.2 percent. The Hang Seng China Enterprises Index slid 1.6 percent. The yen appreciated against all 16 most-traded peers and the dollar strengthened versus all but the yen. The yield on Spain’s 10- year bond climbed 12 basis points. Ten-year Treasury yields fell four basis points to 2.16 percent. Oil slipped 0.3 percent.
Global stocks are retreating at the end of the best first- quarter rally since 1998. More than $5.6 trillion has been added to equity values worldwide this year on signs of a U.S. economic recovery and efforts to contain Europe’s debt crisis. Declines today came as Hennes & Mauritz AB, Europe’s second-largest clothing retailer, and PICC Property & Casualty Co., China’s biggest non-life insurer, reported earnings that missed estimates and U.S. jobless claims topped forecasts.
“With all good news being factored in, we are coming to a tougher period, and markets are vulnerable,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management.
The S&P 500 has climbed 12 percent so far this year and the MSCI All-Country World Index has gained 11 percent.
Retreat From Peak
The S&P 500 has retreated for three straight days after closing at an almost four-year high on March 26. U.S. initial jobless claims fell by 5,000 in the week ended March 24 to 359,000, the lowest since April 2008, the Labor Department reported. The median forecast of economists in a Bloomberg News survey called for 350,000 claims. The government data also contained revisions dating back to 2007.
The economy in the U.S. grew at a 3 percent annual rate in the last three months of 2011, the same as previously estimated, while corporate profits climbed at the slowest pace in three years, raising the risk that business investment and hiring will cool.
The increase in gross domestic product was the biggest in more than a year and followed a 1.8 percent gain in the prior period, revised figures from the Commerce Department showed today. Company earnings were up 0.9 percent from the third quarter, the smallest advance since the last three months of 2008.
More than five shares fell for every one that advanced in the Stoxx 600. H&M slid 5.1 percent as increased textile costs and markdowns led to the weakest profitability in eight years. FirstGroup Plc plunged 14 percent after the transport operator said it’s facing “challenging trading conditions” in its U.K. bus business.
Aid Ceiling
Greece will probably have to restructure its debt again and this may involve bailout partners such as European governments, said Moritz Kraemer, head of sovereign ratings at S&P.
European governments are preparing for a one-year increase in the ceiling on rescue aid to 940 billion euros to keep the debt crisis at bay, according to a draft statement written for finance ministers before a meeting in Copenhagen tomorrow.
The yen strengthened 1 percent against the dollar, and climbed 1.4 percent versus the euro. The 17-nation euro weakened 0.4 percent to $1.3268.
Italian Auction
The Italian 10-year bond yield rose nine basis points to 5.19 percent even as borrowing costs fell at the sale of 3.25 billion euros ($4.3 billion) of bonds due in September 2022. The yield on similar-maturity German bunds, Europe’s benchmark government security, fell two basis points to 1.81 percent.
The yield on the 10-year U.S. Treasury note decreased before the government auctions $29 billion of seven-year securities, the last of three note sales this week.
Oil fell to $105.13 a barrel in New York, extending yesterday’s 1.8 percent decline. U.S. crude stockpiles rose 7.1 million barrels in the week ended March 23, the Energy Department reported yesterday. Supplies were forecast to increase 2.6 million barrels, according to the median estimate of 12 analysts surveyed by Bloomberg News.
The MSCI Emerging Markets Index lost 1,2 percent. Russia’s Micex slipped 1.5 percent as oil retreated and benchmark gauges in Poland and the Czech Republic sank at least 1.4 percent. India’s Sensex slipped 0.4 percent
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net
To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomberg.net
