Stocks, Copper Fall, U.S. Index Futures Fluctuate; Yen Advances
By Stephen Kirkland
June 25 (Bloomberg) -- Stocks in Europe and Asia fell, with the MSCI World Index extending its longest losing streak in a month, after the U.S. government said first-quarter economic growth was less than previously reported and investors speculated the Group of 20 summit will fail to address Europe’s debt crisis. The yen strengthened and copper declined.
The MSCI index of stocks in 24 developed nations retreated for a fourth day, sinking 0.3 percent at 9:07 a.m. in New York. The Stoxx Europe 600 Index slid 0.3 percent, while futures on the Standard & Poor’s 500 Index shifted between gains and losses. The yen traded near a two-week high against the euro, and copper dropped 0.4 percent.
European shares extended declines after the Commerce Department in Washington said gross domestic product grew at a 2.7 percent annual rate in the first quarter, less than previously calculated. A meeting of G-20 leaders tomorrow in Canada may underline a transatlantic rift over measures to deal with record deficits without stifling economic growth.
“People are somewhat circumspect about the prospects for global growth,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “Doubts about how strong the U.S. recovery is and its trajectory, particularly for the second half of 2010, have increased.”
European stocks slipped for a fourth day, the longest stretch of declines for seven weeks. BP Plc tumbled 4.5 percent in London as the first tropical storm of the Atlantic hurricane season has a 60 percent chance of forming this weekend, with one computer model indicating it could head into the Gulf of Mexico where BP has a flotilla of vessels trying to clean up the worst U.S. oil spill.
Financial Overhaul Bill
Banks gained as U.S. lawmakers reached a compromise on a measure that will force lenders to move their swaps-trading desks to subsidiaries, clearing the way for a final agreement on the biggest overhaul of financial regulation since the 1930s. Societe Generale SA gained 2.3 percent in Paris, and HSBC Holdings Plc rose 1.9 percent in London.
U.S. futures slipped 0.1 percent, after yesterday’s 1.7 percent drop in the S&P 500. Research In Motion Ltd. declined 6 percent in trading before the official open of U.S. exchanges after the maker of the BlackBerry smartphone reported sales that trailed analysts’ estimates. Oracle Corp., the world’s second- largest software maker, advanced 3.6 percent in premarket trading as earnings topped analysts’ forecasts.
The MSCI Asia Pacific Index lost 1.5 percent, the most in almost three weeks. The MSCI Emerging Markets Index fell for a fourth day, dropping 0.7 percent and heading for the longest stretch of losses in seven weeks. South Korea’s won led declines among developing-nation currencies, weakening 2.2 percent against the dollar.
Bond Risk Rises
The cost of insuring Greece’s government debt using credit- default swaps rose to a record, with contracts on the nation jumping 13 basis points to 1,140, according to CMA DataVision. The premium investors demand to hold Greek 10-year government bonds over benchmark German bunds rose 3 basis points, or 0.03 percentage point, to 784 basis points. The increases signaled that investor perceptions of Europe’s second most-indebted nation are deteriorating on concern a $1 trillion rescue package from the European Union and International Monetary Fund won’t be enough to keep it afloat longer term.
The yen strengthened 0.5 percent to 109.9 per euro, and was little changed versus the dollar at 89.47. The euro was 0.4 percent weaker at $1.2289.
Treasuries headed for a second weekly advance, as the decline in stocks boosted demand for the perceived safety of government debt. The yield on the 10-year note dropped one basis point, or 0.01 percentage point, to 3.14 percent in New York, according to BGCantor Market Data.
Biggest Rally
China’s yuan strengthened 0.1 percent to 6.7921 per dollar, headed for its biggest weekly gain since December 2008 after policy makers set the currency’s daily reference rate at a record high. The yuan has climbed almost 0.5 percent since the People’s Bank of China said June 19 it would end a two-year peg to the dollar. Twelve-month non-deliverable yuan forwards weakened 0.1 percent to 6.6768.
Copper for delivery in three months dropped to $6,665 a metric ton on the London Metal Exchange and oil for August delivery was up 0.4 percent at $76.80 a barrel on the New York Mercantile Exchange. Gold was little changed at $1,246.30 an ounce, heading for the first weekly decline in a month.
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