BLBG: U.S. Stocks Fall As Spanish Bond Yields Advance To Record
U.S. stocks fell, following a two- week rally, amid concern about a worsening of Europe’s debt crisis as Spanish bond yields climbed to a euro-era record.
Stocks pared losses as confidence among U.S. homebuilders climbed in June to a five-year high, indicating a brighter outlook for residential construction. A measure of builders in S&P indexes rose 0.9 percent as Lennar Corp. jumped 1.6 percent. Morgan Stanley (MS) and Bank of America Corp. retreated at least 1.1 percent to pace declines in financial companies. Anadarko Petroleum Corp (APC) and Baker Hughes Inc. (BHI) lost more than 1.3 percent as oil slumped amid a stronger U.S. dollar against the euro.
The Standard & Poor’s 500 Index lost 0.2 percent to 1,340.63 as of 10:16 a.m. in New York, trimming an earlier decline of as much as 0.6 percent. The Dow Jones Industrial Average declined 35.30 points, or 0.3 percent, to 12,731.87.
“Spain is the issue to worry about, not Greece,” said Michael Strauss, who helps oversee about $26 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut. “Their debt issues are the real debt issues. Greece is the sideshow. We’re going to have some indigestion.”
Equities dropped as Spain’s 10-year bond yields rose above 7 percent, sparking concern that the nation will need external funding. Stock futures rose earlier today as an election win by Greece’s biggest pro-bailout party eased expectations about an imminent exit from the euro.
Concern about Europe’s crisis put the S&P 500 on the brink of a so-called correction this month. It fell 9.9 percent from an almost four-year high in April through June 1. Since then, the lowest valuation in six months and bets on global policy action drove the measure up 5.1 percent through last week.
In the U.S., the National Association of Home Builders/Wells Fargo confidence index rose to 29, the highest since May 2007, from a revised 28 in May that was lower than first estimated, a report from the Washington-based group showed today. The gauge exceeded the median estimate of 28 in a Bloomberg News survey. Readings below 50 mean more respondents said conditions were poor.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
