Stocks, Oil Retreat as Treasuries, Yen Gain on Greece Concern
By Rita Nazareth and Kelly Bit
June 24 (Bloomberg) -- Stocks and oil fell while Treasuries advanced and the yen strengthened against the dollar as the surging cost to protect from a Greek default spurred concern the European debt crisis is worsening.
The Standard & Poor’s 500 Index declined 1,5 percent at 11:09 a.m. in New York, led lower by banks and retailers. It has lost 3.7 percent in the past four days. The Stoxx Europe 600 Index fell 1.9 percent. Yields on two-year Treasuries slipped to 0.63 percent, the lowest since November. The dollar fell 0.6 percent to 89.28 yen. Credit-default swaps on Greece government debt rose 145 basis points to a record 1,077 basis points.
Higher prices for Greek default protection underscored concern that the global economic recovery will slow. European industrial orders increased less than economists projected. Banks helped lead the slump in stocks, while retailers fell after home-furnishings seller Bed Bath & Beyond Inc. and Nike Inc., the athletic shoemaker, missed estimates.
“It’s not like Greece is anything new, but it’s a question of the magnitude and is it contained,” said William Nichols, co- head of U.S. equities at Cantor Fitzgerald LP in New York. “There’s just uncertainty about what it’s going to mean for reigniting growth.”
Bank of America Corp. and JPMorgan Chase & Co. decreased more than 2 percent in U.S. stock trading while BNP Paribas and Societe Generale SA dropped at least 4.7 percent in Europe. Retailers slumped in the U.S. after Bed Bath & Beyond Inc., the home-furnishings seller whose shares lost 4.1 percent, missed earnings estimates. Nike Inc. slid 3.6 percent as the athletic shoemaker’s sales trailed projections.
Unemployment, Durable Goods
Stocks fell even after government reports showed unemployment claims fell from a two-month high and durable-goods orders excluding transportation equipment increased.
The number of Americans applying for jobless benefits decreased by 19,000 to 457,000 in the week ended June 19, according to the Labor Department. Orders for goods meant to last at least three years, excluding autos and aircraft, rose in May for the third time in four months. The 0.9 percent increase followed a 0.8 percent decrease in April, figures from the Commerce Department showed. The S&P 500 dropped yesterday after new-home sales sank to a record low.
“The economic figures this morning were encouraging given the disappointments we had with housing data,” said Hank Smith, who helps oversee $6 billion as chief investment officer of Haverford Trust Co. in Radnor, Pennsylvania. “Because of subpar growth, we’ll get mixed economic numbers. Whatever is happening in Europe and China is going to slow the growth rate.”
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