BLBG:Stocks Fall As Japan Growth Slows; U.S.Treasuries Advance
Stocks (SXXP) and U.S. equity-index futures fell while Treasuries rose as slowing economic growth in Japan added to signs the global recovery is faltering. Wheat and copper declined.
The Stoxx Europe 600 Index and Standard & Poor’s 500 Index futures both slipped 0.3 percent at 9:45 a.m. in London. Shares sank the most in four weeks in Shanghai as Bank of America Corp. cuts its growth outlook for China. The dollar rose against all but two of its major peers and the 10-year Treasury note yield fell three basis points. Wheat dropped 1.4 percent and copper declined 1.1 percent.
Japan said the economy grew 1.4 percent in the second quarter, compared with the 2.3 percent expansion forecast in a Bloomberg survey. Europe’s crisis has “no obvious end in sight,” Bank of England Governor Mervyn King said in an article the Mail on Sunday, before a report tomorrow that may show the euro-area’s economy contracted in the three months through June 30. Federal Reserve Bank of San Francisco President John Williams said it’s time to move ahead with a third round of asset purchases, according to the San Francisco Chronicle.
“Japan’s GDP highlighted the fragility of the global economic situation,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. (WBC) in Singapore. “Tomorrow’s GDP from the euro zone and the key European economies is likely to highlight a similar situation.”
Three shares fell for every one that rose on the Stoxx 600. Julius Baer Group AG dropped 5 percent, its biggest slide in almost three months, after agreeing to pay about 860 million Swiss francs ($879 million) to buy the wealth-management business outside the U.S. of Bank of America’s Merrill Lynch unit.
Standard Chartered
Nokia Oyj retreated 1.9 percent as Danske Bank A/S said the mobile-phone maker may soon sell new shares. Standard Chartered Plc added 1.8 percent after Reuters reported that the bank has discussed a settlement with the New York regulator that accused it of concealing transactions with Iranian banks.
S&P 500 futures declined, indicating the equity benchmark will fall from its highest level since April.
The MSCI Emerging Markets Index dropped 0.4 percent after four weeks of gains. The Shanghai Composite Index lost 1.5 percent as Bank of America cut its 2012 growth forecast for China to 7.7 percent from 8 percent. South Korea’s Kospi Index slipped 0.7 percent. Russia’s Micex Index rose 0.5 percent.
The yield on 10-year Treasuries fell to 1.63 percent, while the rate on similar-maturity German bunds dropped one basis point to 1.37 percent.
Italy Auction
Italian two-year debt slid a fifth day before the nation sells as much as 8 billion euros ($9.8 billion) of one-year bills. The note yield rose four basis points to 3.44 percent.
The dollar climbed most against the South African rand and New Zealand dollar. It was little changed at $1.2284 per euro and 78.23 yen.
Wheat and corn fell amid forecast for rain in U.S. growing regions. Copper declined for a fourth day. Japan is the fourth- biggest consumer of the metal. Brent oil climbed 0.3 percent to $113.30 a barrel.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
