Euro, Stocks, Bonds Drop on Bailout Concern; U.S. Futures Fall
Nov. 29 (Bloomberg) -- The euro weakened, stocks extended losses into a fourth week and bonds dropped as Ireland's 85 billion-euro ($113 billion) bailout failed to ease concern the region's most-indebted nations will need further aid. U.S. index futures declined, while oil advanced.
The euro depreciated against all 16 of its major counterparts at 9:10 a.m. in New York. The Stoxx Europe 600 Index fell 1 percent after advancing 0.8 percent, while futures on the Standard & Poor's 500 Index slipped 0.4 percent. The yield on Spain's 10-year bond added 17 basis points, while Portugal's yield climbed seven basis points. The cost of insuring the countries' debt against default jumped to records. Oil traded at the highest level in two weeks.
While National Retail Federation data showed shoppers in the U.S. spent 6.4 percent more than last year over the holiday weekend, investors remained concern that an agreement by European governments to rescue Ireland may not be sufficient to stem the debt crisis. Italy's borrowing costs rose at a sale of bonds today. Declines in global stocks over the past three weeks wiped out $2.3 trillion from markets.
"The choices are still between default, deliberate devaluation and divorce from the euro," Kit Juckes, head of foreign-exchange research at Societe Generale SA in London, wrote in a report. "The weekend bailout offers a delay in making these choices rather than providing the answers markets were looking for. The bottom line is that the crisis is far from over."
Euro, Franc
The euro declined 1 percent against the dollar and 0.8 percent per yen. It lost 1 percent versus the Swiss franc. The franc advanced against 14 of its 16 main counterparts.
The yield on Italian 10-year debt advanced 15 basis points to 4.58 percent as the government auctioned 6.8 billion euros of bonds due in 2013, 2017 and 2021. Credit-default swaps on Spain climbed 24 basis points to 247 while contracts on Portugal increased 36.5 basis points to 538.5, according to CMA, a data provider. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments increased six basis points to a record 194.
Irish bonds fell, erasing earlier gains, sening the extra yield investors demand to hold 10-year Irish bonds instead of benchmark German bunds six basis points higher, widening for the seventh day. The cost of default swaps on Irish government debt rose four basis points to 602, while contracts on Greece dropped 21 basis points to 951, according to CMA.
More than eight stocks fell for every one that rose in Europe's Stoxx 600. Daimler AG, the world's second-largest luxury carmaker, dropped 2.6 percent. Banco Santander SA, Spain's biggest lender, slipped 1.5 percent. Bank of Ireland Plc soared 19 percent.
Asian Stocks
The MSCI Asia Pacific Index rose 0.6 percent. Sony Corp., Japan's biggest exporter of consumer electronics, added 2.8 percent as Nomura Holdings Inc. rated the stock a "buy." Nissan Motor Co., Japan's third-largest automaker by sales, climbed 1.5 percent.
The decline in U.S. futures indicated the S&P 500 may extend last week's 0.9 percent retreat. Employment increased by 145,000 workers this month after a 151,000 increase in October that marked the biggest advance since May, according to the median forecast of 67 economists surveyed by Bloomberg News before the Labor Department's Dec. 3 report. Manufacturing, the industry leading the U.S. recovery that began in July 2009, expanded in November for a 16th consecutive month, economists expect data released on Dec. 1 to show.
Christmas Rally
"Focus will revert back to equity markets given the deluge of economic data due this week, which will set the tone for December and the potential for a Christmas rally given the resolution of the euro-zone sovereign crisis, at least for now," said Rajeev Shah, a credit strategist at BNP Paribas SA in London.
Hungary's BUX index dropped as much as 2.7 percent, bringing its decline from its 2010 peak to more than 20 percent, poised to become the first emerging-market stock gauge to enter a bear market since global equities began falling this month. Turkey's key index also fell 2.7 percent, bringing its retreat from the peak on Nov. 9 to 10 percent, the threshold for a so- called correction.
The MSCI Emerging Markets Index slipped less than 0.1 percent, erasing gains of as much as 0.7 percent. South Korea's Kospi Index retreated 0.3 percent after President Lee Myung Bak said North Korea will be made to pay for any more provocation as his nation and the U.S. held joint military exercises.
The S&P GSCI Index of 24 commodities rose 0.7 percent. Oil increased 0.7 percent to $84.35 a barrel. Gold for immediate delivery was little changed at $1,363.25 an ounce.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Víctor Lei
No comments:
Post a Comment