Euro Drops With Commodities on European Crisis

U.S. stocks fell for a third day and commodities dropped as European leaders clashed on ways to stem the debt crisis and reports from China and Germany signaled the slowdown is deepening. Treasuries rose and the euro slid.

The Standard & Poor’s 500 Index slid 0.2 percent to 1,456.89 as of 4 p.m. in New York for the longest streak of losses in seven weeks. The MSCI All-Country World Index lost 0.4 percent. The euro weakened 0.4 percent to $1.2929. The S&P GSCI gauge of 24 commodities retreated 1 percent as oil slumped 1 percent. Ten-year Treasury notes gained for a sixth day.

Chancellor Angela Merkel and President Francois Hollande disagreed on a timetable for starting joint oversight of Europe’s banking sector. German business confidence unexpectedly fell in September, the Ifo institute in Munich said. China’s manufacturers and retailers are less optimistic about sales than they were three months ago and are cutting jobs, according to the findings of a survey by New York-based researcher CBB International LLC.

“The global macro concern could prove challenging for stocks in the near term,” David Sowerby, a fund manager at Boston-based Loomis Sayles & Co., said in a telephone interview. His firm oversees about $170 billion. “When Germany says you need to be responsible and they voice their apprehension, that’s simply uncertainty that the market does not like.”

Germany’s governing coalition showed growing exasperation with Spain, as a senior ally of Chancellor Angela Merkel said Prime Minister Mariano Rajoy must stop prevaricating and decide whether Spain needs a full rescue.

‘Communications Problem’

“He must spell out what the situation is,” Michael Meister, finance spokesman for Merkel’s Christian Democratic Union, said in an interview in Berlin today. The fact he’s not doing so shows “Rajoy evidently has a communications problem. If he needs help he must say so.”

Apple Inc. slid 1.3 percent after saying it sold more than 5 million of the iPhone 5 in three days, fewer than Piper Jaffray Cos.’s projection of as many as 10 million during the opening weekend. Facebook Inc. slumped 9.1 percent after surging 27 percent since the end of August.

The Stoxx Europe 600 Index declined 0.4 percent. The gauge, which is trading near its highest price-to-estimated-earnings ratio since 2010, has still surged 17 percent from this year’s low in June as the European Central Bank and the Federal Reserve introduced new bond-buying programs.

European Stocks

CGGVeritas declined 5.3 percent after the world’s largest surveyor of oilfields agreed to buy Fugro (FUR) NV’s seismic division for 1.2 billion euros ($1.6 billion). Fugro rose 2.1 percent in Amsterdam. QinetiQ Plc, the military researcher split off from the U.K. Ministry of Defense, jumped 6.5 percent after saying its performance in the first half was stronger than forecast.

The euro dropped as much as 1.1 percent to 100.36 yen.

“A period of consolidation in the month ahead looks the more likely outcome,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth management unit. The Swiss bank has about $1.5 trillion in assets under management. “In Europe, there will continue to be some lingering challenges.”

Australia’s dollar weakened 0.3 percent to $1.0422. New Zealand’s currency declined 1 percent to 82.12 U.S. cents.

The yield on 10-year Treasuries slipped three basis points to 1.72 percent, while rates on German bunds of similar maturity declined three basis points to 1.56 percent.

Crude in New York slipped to $91.93 a barrel and copper declined 1.5 percent. Arabica coffee dropped 0.6 percent after rising 2.8 percent on Sept. 21.

The MSCI Emerging Markets Index (MXEF) dropped 0.2 percent. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong slipped 0.4 percent. PT Bumi Resources (BUMI) tumbled 19 percent leading Indonesian stocks lower after a shareholder started a probe into the company’s finances. Vietnam’s VN Index sank 1.3 percent after inflation quickened for the first time in more than a year.

To contact the reporters on this story: Lu Wang in New York at lwang8@bloomberg.net; Joseph Ciolli in New York at jciolli@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.