Stocks and commodities slid for a fifth straight day while Treasury yields declined to the lowest level this year amid signs the U.S. recovery is slowing. The Australian dollar depreciated after the Reserve Bank kept its cash rate unchanged. The MSCI All-Country World Index lost 0.4 percent at 4:06 p.m. in Tokyo. Standard & Poor’s 500 Index futures slipped 0.3 percent following a six-day slump. Yields on 10-year Treasuries dropped four basis points to 2.70 percent. The S&P GSCI Index of 24 raw materials decreased 0.3 percent as oil traded near the lowest in more than a month in New York. The so-called Aussie fell 0.7 percent versus the dollar and the euro sank 0.4 percent. Concern is shifting to the slowing U.S. recovery after the House approved legislation to raise the debt limit, a day before a possible default. A report today is forecast to show personal spending stagnated in June, after data yesterday showed a gauge of manufacturing weakened to a two-year low. Indian central bank Governor Duvvuri Subbarao said the nation needs to lift interest rates, while the official Xinhua News Agency’s financial services website said China may raise rates around Aug. 10. “Global growth is something we need to focus back on,” said Tim Schroeders, who helps manage $1 billion in global equities at Pengana Capital Ltd. in Melbourne. “The inference from this bill is we’re likely to see spending cuts and economic activity slowing further as a result. Strategists and investors will need to readdress their growth expectations for the U.S. and ultimately global growth moving forward.” Stocks Slide The Stoxx Europe 600 Index retreated 0.4 percent, extending its slump from this year’s high to more than 10 percent. The MSCI Asia Pacific Index sank 1.6 percent, set for the steepest loss since July 12. Japan’s Nikkei 225 Stock Average lost 1.2 percent and South Korea’s Kospi Index retreated 2.4 percent. The Shanghai Composite Index drop 0.9 percent after Xinhua08.com said rates may increase this month, citing its own research. Cosco Corp. Singapore Ltd. sank 12 percent after the shipbuilding unit of China’s biggest shipping company reported a 53 percent drop in quarterly profit. After the close of Japan’s financial markets, Toyota Motor Corp. raised its full-year profit forecast 39 percent. While more companies reporting on MSCI’s Asian index have beaten analysts’ profit estimates than missed, overall profits have contracted 8.7 percent this quarter, according to data compiled by Bloomberg. Kirin Holdings Co., Japan’s second-largest brewer by volume, slipped 0.3 percent after it agreed to pay 3.95 billion reais ($2.5 billion) for Brazilian brewer Aleadri-Schinni Participacoes e Representacoes S.A. America Movil SAB, the wireless carrier controlled by Mexican billionaire Carlos Slim, yesterday offered about $6.5 billion to buy the 40.4 percent of Telefonos de Mexico SAB it doesn’t already own, giving it full control of its former parent. U.S. Economy The S&P 500 fell 0.4 percent yesterday, rounding off a six- day, 4.3 percent drop. Personal incomes probably grew 0.2 percent in June after a 0.3 percent gain the previous month, while consumer spending increased 0.1 percent, according to the median forecasts of economists surveyed by Bloomberg News. Separately, the Labor Department may say on Aug. 5 nonfarm payrolls climbed 85,000 last month, following an 18,000 increase in June that was the smallest this year, a separate survey showed. Treasuries extended a three-day rally. The Senate will today in Washington hold a final vote on the bill, which will raise the U.S. debt limit by at least $2.1 trillion and cut federal spending by $2.4 trillion or more, after the plan was passed 269-161 in the House yesterday. ‘Struggling’ Economy “We are seeing the U.S. economy struggling,” Michael Yoshikami, chief executive officer of YCMNet Advisors, which manages $1.1 billion, in Walnut Creek, California, said in a Bloomberg Television interview. “Just like what has happened with individuals and businesses, the government is now deleveraging. The government is cutting back and it’s going to slow economic growth.” The so-called Aussie fell to $1.0899, extending a three-day slump. The Reserve Bank of Australia kept its benchmark interest rate unchanged at 4.75 percent, citing the clouded global economic outlook. The decision was predicted by 21 of 25 economists surveyed by Bloomberg. The euro traded at $1.42, extending yesterday’s 1 percent drop against the dollar. It fell 0.3 percent to 109.65 yen. Japan’s currency traded was little changed at 77.25 per dollar, after yesterday reaching 76.30, the strongest level since it set a postwar record of 76.25 on March 17. Default Risk The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment increased, with the Markit iTraxx Australia index advancing three basis points to 119 basis points, Westpac Banking Corp. prices show. The gauge is set for the highest close since July 20, according to data provider CMA. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose two basis points to 116.5, Royal Bank of Scotland Group Plc prices show. That will be the highest level since July 29, according to CMA. Oil for September delivery fell 0.4 percent to $94.53 a barrel on the New York Mercantile Exchange. Futures sank 0.9 percent to $94.89 a barrel yesterday, the lowest settlement since June 29. Copper for three-month delivery rose 0.3 percent to $9,680.25 a metric ton in London, following a 1.8 percent slump yesterday. Immediate-delivery gold gained 0.4 percent to $1,626.15 an ounce. Bullion rallied to an all-time high of $1,632.80 on July 29. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Yudith Ho in Singapore at yho29@bloomberg.net To contact the editor responsible for this story: Patrick Chu at pachu@bloomberg.net

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