Stocks and commodities fell after JPMorgan (JPM) Chase & Co. reported a $2 billion trading loss and China’s industrial output unexpectedly slowed. Treasuries rose, heading for their the longest run of weekly gains since Russia’s default in 1998. The MSCI All-Country World Index (MXWD) fell 0.4 percent at 6:40 a.m. in New York. Standard & Poor’s 500 Index futures lost 0.5 percent as JPMorgan, the biggest U.S. bank by assets, tumbled 6.7 percent in pre-market trading. The 10-year Treasury bond yield slipped one basis point. The yield on Italy’s two-year note dropped two basis points after the government sold debt. The euro rose 0.1 percent to $1.2953. Cotton slumped 2.9 percent and oil declined 1 percent. JPMorgan’s Chief Executive Officer Jamie Dimon said an “egregious� failure on its synthetic credit securities led to losses in its chief investment office. China’s industrial production grew the least since 2009 in April, the National Bureau of Statistics said. Italy sold 364-day bills at a yield of 2.34 percent compared with 2.84 percent a month ago. “Clearly JPMorgan got it wrong,� said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “I suspect it’s probably a one off, but it comes during a week where we’ve seen risk off in a big way.� Vallourec Tumbles The Stoxx Europe 600 Index slid 0.5 percent, extending this week’s decline to 1.2 percent. Vallourec SA (VK) plunged 20 percent, the biggest retreat since 2008, as the French producer of steel pipes for the oil and gas industry cut its sales growth forecast and reported profit that missed estimates. Telefonica SA, Spain’s biggest telecommunications company, fell 1.3 percent as first-quarter operating income trailed projections. The decline in S&P 500 futures indicated the U.S. equity gauge will extend this week’s 0.8 percent slide. Bank of America Corp. and Citigroup Inc. declined more than 2.5 percent in German trading. Credit-default swaps insuring JPMorgan’s debt rose 17 basis points to 124, the highest since Feb. 16, according to data compiled by Bloomberg. A report today may show confidence among U.S. consumers declined in May from the highest level in a year. The Thomson Reuters/University of Michigan’s preliminary index of sentiment fell to 76 from 76.4 last month, according to the median of 68 forecasts in a Bloomberg survey of economists. Emerging Markets The MSCI Emerging Markets Index (MXEF) lost 1 percent, extending declines from this year’s March 2 high to 10 percent, the level that some investors consider to signal a correction. The Hang Seng China Enterprises Index (HSCEI) slumped 1.4 percent. India’s Sensex Index slipped 0.9 percent as production at factories, utilities and mines declined in March. Russia’s Micex Index fell 1.6 percent, with OAO MRSK Holding, the state-run power distributor, sinking 10 percent after Interfax reported it may be transferred under the management of Federal Grid Co. The S&P GSCI gauge of 24 commodities dropped 1 percent. Cotton tumbled to a 21-month low. Gold futures were down 0.9 percent at $1,581 an ounce and close to erasing this year’s gain of 0.6 percent. Copper declined 1.1 percent. Oil fell as much as 1.4 percent in New York, heading for a second weekly drop. Germany’s 10-year bund yield fell two basis points, while the yield on Greece’s 10-year note advanced 16 basis points, climbing for the ninth straight day. Greek political leaders go into a fifth day of talks today with Evangelos Venizelos, the socialist Pasok leader, set to press for a unity government that would avert a new election. Antonis Samaras, head of the New Democracy party, said today his sole condition for supporting a coalition government is that it guarantees Greece’s membership of the euro area. To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net; To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

Source