BLBG:Stocks, Commodities Fall on Growth Concern; Bonds Climb
Stocks declined, with an index of emerging-market shares falling the most in two months, and metals slipped as reports signaled economies in Europe and Asia are slowing. The euro weakened and Spanish bonds dropped, while Treasuries gained for a fourth day.
The MSCI All-Country World Index (MXWD) lost 0.6 percent at 7:50 a.m. in New York. The MSCI Emerging Markets Index slid 1.1 percent, the most since July 23, as the Shanghai Composite Index tumbled to the lowest level since February 2009. Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The euro tumbled 0.7 percent to $1.2952. The yield on 10-year Treasury notes sank four basis points to 1.74 percent. Spain’s 10-year yields rose for the first time in three days. Copper and lead both slumped 1.5 percent.
Euro-area services and manufacturing output fell to a 39- month low in September and China’s manufacturing probably contracted for an 11th month, according to data from Markit Economics and HSBC Holdings Plc. Japan’s exports slid for a third month in August, the Finance Ministry said. U.S. manufacturing growth slowed in September and a gauge of leading indicators declined, economists said before reports today.
“We’re very concerned about the near-term outlook for the global economic picture,” Peter Elston, the head of Asia- Pacific strategy at Aberdeen Asset Management, said in a Bloomberg TV interview from Hong Kong today. “There’s some fairly significant weakness just around the corner. We’re fairly cautious.” His firm oversees about $270 billion.
Mining Stocks
The Stoxx Europe 600 Index slid 0.3 percent as mining companies and automakers led losses. Anglo American Plc and Vedanta Resources Plc dropped more than 3 percent. Telenet Group Holding NV (TNET) jumped 13 percent after Liberty Global Inc., the John Malone-led cable-TV company operating outside the U.S., offered to buy the almost 50 percent of the Belgian company that it doesn’t own for 1.96 billion euros ($2.54 billion).
The decline in S&P 500 futures indicated the gauge will retreat for the third time in four days. Nike Inc. advanced 1 percent in German trading as the world’s largest maker of sporting goods announced an $8 billion, four-year program to repurchase class B shares. Norfolk Southern Corp. fell 5.4 percent as the second-biggest eastern U.S. railroad forecast third-quarter profit that trailed analysts’ estimates.
The Markit Economics preliminary index of U.S. manufacturing fell to 51.5 in September from 51.9 last month, economist forecasts compiled by Bloomberg show. A reading above 50 in the purchasing managers’ measure indicates expansion.
Leading Indicators
The Federal Reserve Bank of Philadelphia’s economic index will probably be minus 4.5 for September, showing contraction for a fifth straight month, according to a Bloomberg survey of economists. The Conference Board’s gauge of leading economic indicators probably fell 0.1 percent in August, after gaining 0.4 percent in July, a separate survey showed.
Ten-year Treasury Inflation Protected Securities rose for a second day, pushing yields toward a record low, as the U.S. prepared to sell $13 billion of the securities. TIPS yields fell two basis points to negative 0.80 percent, after reaching minus 0.86 percent on Sept. 17.
Germany’s 10-year bond yield declined four basis points to 1.58 percent and the rate on similar-maturity U.K. gilts dropped three basis points to 1.81 percent. Spain’s 10-year bond yield rose seven basis points to 5.76 percent as the government sold 4.8 billion euros of bonds, beating the 4.5 billion euro maximum target.
The euro declined against 12 of its 16 major counterparts, losing 1.6 percent versus the yen. Japan’s currency appreciated against all of its main peers.
In emerging markets, the Shanghai Composite Index tumbled 2.1 percent. The Hang Seng China Enterprises Index of mainland companies declined 1.4 percent. India’s Sensex index fell 0.8 percent and Russia’s Micex Index dropped 0.5 percent. Benchmark gauges in Poland, Malaysia and Egypt lost at least 1.3 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
