Asian stocks and U.S. futures fell, Treasury 10-year yields sank to a record, and the euro slid for a fifth day against the franc on speculation Europe’s debt crisis is worsening. Gold climbed to an all-time high. The MSCI Asia Pacific Index dropped 1.8 percent at 3:04 p.m. in Tokyo and Euro Stoxx 50 Index futures decreased 1.2 percent. Standard & Poor’s 500 Index futures lost 2.2 percent, while Treasury 10-year yields reached a low of 1.91 percent. The euro slid 0.5 percent to 1.1040 Swiss francs. Crude declined 3.6 percent in New York. Gold topped $1,920 an ounce for the first time. The Markit iTraxx Asia index that tracks default risk for 50 borrowers headed for the highest close since July 2009. Financial shares led losses in Asia, following a slump in Europe as the cost of bank default insurance surged to records. Ministers from Germany, Finland and the Netherlands will meet today to discuss a Finnish demand for collateral in a bailout for Greece, while the Italian Senate will debate an austerity plan amid a strike. Data today may show U.S. services industries grew at the slowest pace in more than a year as markets there resume trading after Labor Day. “It’s another market riot,” said Nader Naeimi, a Sydney- based strategist for AMP Capital Investors Ltd., which manages almost $100 billion. “Volatility is likely to remain high until there’s clarity around Europe’s ability to work out a lasting solution. Right now, it seems policy makers are going in the opposite direction.” More than five shares retreated for every one that gained on MSCI’s Asia Pacific Index, which is extending a two-day, 3.7 percent slump. The gauge is valued at 11.6 times estimated earnings, the lowest level since November 2008, according to data tracked by Bloomberg. Japan’s Nikkei 225 Stock Average slid 2.2 percent, Australia’s S&P/ASX 200 Index declined 1.5 percent and Taiwan’s Taiex Index retreated 2.4 percent. ‘Free-fall’ “There are some very, very cheap markets in Asia right now but obviously we’re in free-fall so you’ve got to pick your entry,” Todd Martin, an Asia equity strategist at Societe General SA, said in a Bloomberg Television interview in Hong Kong. “The euro-basis risk among banks is getting wider, so we’re getting into crisis territory.” An index of financial companies on MSCI’s Asian index dropped 2.1 percent, paced by losses in National Australia Bank Ltd. (NAB) and Sumitomo Mitsui Financial Group Inc. Toshiba Corp., Japan’s largest maker of nuclear power plants, sank 5.1 percent after the Wall Street Journal reported that the company is in talks to buy Shaw Group’s 20 percent stake in Westinghouse Electric, a nuclear reactor builder. U.S. Futures Futures expiring in September indicate the S&P 500 may extend a two-day, 3.7 percent sell-off. Data today may show U.S. services industries grew at the slowest pace in more than a year, two days before President Barack Obama addresses the nation on his plan to reignite the economy and boost hiring. Yields on Treasury 10-year notes fell six basis points to 1.93 percent after earlier retreating as much as eight basis points. Demand for longer maturities narrowed the extra yield that investors get for buying 10-year notes instead of two-year debt to 1.71 percentage points, the least since March 2009. Bonds of Europe’s most-indebted nations dropped yesterday, with the yield on two-year Greek notes rising above 50 percent for the first time. The European Union and International Monetary Fund officials decided last week to suspend a review of Greece’s budget. Euro Weakens Finland’s Finance Minister Jutta Urpilainen will meet with her German and Dutch counterparts today. Finnish Prime Minister Jyrki Katainen said yesterday his nation will find a Greek collateral model that respects the priority creditor status of the IMF and honors existing bondholder claims. The Stoxx Europe 600 Index dropped 4.1 percent yesterday, rounding out its worst two-day loss since March 2009, after a measure of banks on the gauge sank 5.9 percent. Futures on the FTSE 100 Index sank 1.1 percent, indicating the U.K. stock benchmark may extend its two-day 5.8 percent slump. The euro retreated for a sixth day against both the yen and dollar. Deutsche Bank AG Chief Executive Officer Josef Ackermann said yesterday market conditions remind him of late 2008 and urged lawmakers to act to avoid a repeat of the financial crisis. The Australian dollar slid 0.4 percent to $1.0508, weakening for a third day. The Reserve Bank of Australia kept its overnight cash rate target unchanged at 4.75 percent for a ninth straight meeting today, a decision predicted by all 25 economists surveyed by Bloomberg News. The New Zealand dollar slid 0.4 percent to 82.84 U.S. cents. South Korea’s won slid 0.6 percent to 1,074.82 per dollar, while Malaysia ringgit weakened 0.2 percent to 2.9885 against the U.S. currency. Ebbing Inflation Taiwan’s government bonds advanced for a third day, pushing five-year yields down two basis points to this year’s low of 0.94 percent, after data showed consumer prices rose less than economists estimated in August. Philippine debt also rallied, with the yield on the 8 percent July 2031 peso bond sliding six basis points to 7.072 percent, on lower-than-expected inflation. Taiwan’s inflation rate was 1.34 percent, little changed from 1.33 percent in July, the statistics bureau reported late yesterday. That compared with the median forecast of 1.5 percent in a Bloomberg survey. The Philippine government said today that consumer prices increased 4.7 percent from a year earlier, after a 5.1 percent rise in July. The median estimate in a Bloomberg News survey was for a 5 percent gain. Default Risk The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan surged 12 basis points to 175 basis points, while the Markit iTraxx Australia index increased 12 basis points to 185.5 basis points, Credit Agricole CIB prices show. Both gauges are headed for their highest close since July 2009, according to data provider CMA, which is owned by CME Group Inc. and compiles credit-default swap prices quoted by dealers in the privately negotiated market. Oil for October delivery fell as much as 3.8 percent to $83.20 a barrel on the New York Mercantile Exchange before trading at $83.38. Floor trading was closed yesterday for the Labor Day holiday and electronic trades will be booked with today’s transactions for settlement purposes. Brent crude decreased less than 0.1 percent to $110.01 a barrel, following three days of losses. Gold for immediate delivery rallied 1 percent to $1,918.95 an ounce after earlier reaching a record $1,920.25. December- delivery copper dropped as much as 2.5 percent on the Comex in New York to $4.022 a pound, while three-month copper on the London Metal Exchange retreated for a fourth day, sliding 0.8 percent to $8,888.50 a metric ton. Wheat futures expiring in December slipped 1.4 percent to $7.645 a bushel on the Chicago Board of Trade. Corn slid 1.3 percent, while soybeans retreated 1.4 percent. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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