June 26 (Bloomberg) -- U.S. stocks fell, giving the Standard & Poor’s 500 Index the first two-week decline since March, after the highest American savings rate in 15 years spurred concern that consumer spending will slow and oil retreated. The dollar dropped after China’s central bank reiterated a call for a worldwide currency.

Exxon Mobil Corp. and Tesoro Corp. declined as crude oil futures lost 1.5 percent to $69.16 a barrel. The Russell 2000 Index of so-called small-cap companies added 0.7 percent as investors placed bets on the annual revision of stock weightings, to be completed after the close of trading today.

The S&P 500 decreased 0.2 percent to 918.88 at 4 p.m. in New York. The Dow Jones Industrial Average fell 34.01 points, or 0.4 percent, to 8,438.39. The dollar slumped 0.7 percent against the currencies of six trading partners as China sought to replace it.

“The magnitude of that savings rate may have gotten some folks by surprise,” said Philip Orlando, who helps manage $409 billion as chief equity market strategist at Federated Investors Inc. in New York. Economic and earnings growth is “potentially not going to be as robust as some were thinking. That’s weighing on stocks.”

While the stock market has rebounded since March on optimism the deterioration in the global economy will slow, U.S. business activity is probably contracting for a fourth consecutive quarter, according to economists’ estimates. The S&P 500, which advanced 36 percent in 3 1/2 months through yesterday, has fallen 0.3 percent since June 19.

Dollar Falls

The dollar dropped against most of its major counterparts after China repeated its call for a supranational currency “delinked” from sovereign nations.

The greenback headed for its biggest weekly loss against the euro in four weeks after the People’s Bank of China said the International Monetary Fund should manage more of members’ foreign-exchange reserves. A rally in Treasuries this week pushed the yield on the benchmark 10-year note down the most since December, lowering expected returns.

The U.S. currency declined 0.6 percent to $1.4078 per euro at 3 p.m. in New York, from $1.3988 yesterday, extending its loss this week to 1 percent. The dollar fell 0.8 percent to 95.17 yen from 95.95 and was poised for a 1.1 percent weekly decline, its third consecutive drop.

Treasuries Rise

Treasuries rose for a second day after a report showed inflation moderated in May, bolstering expectations that the Federal Reserve will keep interest rates near zero through the rest of the year.

Ten-year note yields are heading for the biggest weekly decline since December after the Commerce Department said a price gauge tied to consumer spending patterns rose 0.1 percent from May 2008, the smallest gain since records began in 1959. The savings rate surged to 6.9 percent, the highest level since December 1993.

The yield on the benchmark 10-year note fell five basis points, or 0.05 percentage point, to 3.50 percent at 2:40 p.m. in New York, according to BGCantor Market Data. The yield touched 3.492, the lowest level since June 1. The price of the 3.125 percent security due in May 2019 rose 3/8, or $3.75 per $1,000 face amount, to 96 28/32.

Ten-year yields fell 28 basis points since June 19, the biggest weekly drop since the five days through Dec. 19, when the rate decreased 45 basis points.

Gold Hits 2-Week High

Gold touched a two-week high and marked its first weekly gain since May as the dollar weakened and a benchmark lending rate touched a record low in London, increasing the metal’s appeal as an alternative investment.

The three-month London interbank offered rate, or Libor, slipped below 0.6 percent for the first time. The dollar-based rate, a benchmark for about $360 trillion in financial products, peaked at 4.82 percent on Oct. 10.

Gold futures for August delivery rose $1.50, or 0.2 percent, to $941 an ounce on the New York Mercantile Exchange’s Comex division, after earlier touching $949, the highest since June 12. The 0.5 percent weekly gain was the first since May 29. The four-day rally was the longest in five weeks.

In London, bullion for immediate delivery gained $1.34, or 0.1 percent, to $940.59 an ounce at 8:17 p.m. local time. The metal slipped to $942 an ounce in the afternoon “fixing” in London, the price used by some mining companies to sell their output, from $943 this morning.

Crude oil and gasoline tumbled after the government said the savings rate climbed to the highest level in more than 15 years and as equities slipped. Oil fell $1.07 at 2:50 p.m. on the Nymex. The August contract declined 1.2 percent this week. Prices have increased 55 percent this year.

Gasoline for July delivery declined 2.42 cents, or 1.3 percent, to end the session at $1.8741 a gallon in New York.

To contact the reporters on this story: Elizabeth Stanton in New York at estanton@bloomberg.net; Margot Habiby in Dallas at mhabiby@bloomberg.net.

Last Updated: June 26, 2009 17:00 EDT