Stocks, Italian Bonds Decline Amid Bailout Concern; Yen Tumbles

Stocks retreated from an almost three-month high as Italian and Spanish bonds fell amid concern European leaders will struggle to raise funds to contain the region’s debt crisis. The yen sank from a post-World War II record against the dollar after Japan intervened in the market.

The MSCI All-Country World Index lost 3 percent at 4:24 p.m. New York time, trimming its monthly rally to 10 percent, still the most since April 2009. Deutsche Bank AG, BNP Paribas SA and Morgan Stanley dropped at least 8.6 percent. The Standard & Poor’s 500 Index slipped 2.5 percent, the most since Oct. 3. Italian five-year yields rose 13 basis points to 5.88 percent. German bunds and U.S. Treasuries advanced. The yen tumbled as much as 4.6 percent against the dollar, the most since 2008. Copper futures fell 2 percent.