S&P 500 Falls as Euro Drops to Four-Month Low; Italy Bond

Treasuries rallied and the euro weakened to a four-month low against the dollar, while Italian and Spanish bonds slumped, as concern about Europe’s debt crisis deepened. Most U.S. stocks fell, even as the Standard & Poor’s 500 Index pared a drop of as much as 0.8 percent.

Ten-year Treasury yields slid seven basis points to a three-week low of 1.84 percent while Italy’s 10-year yield jumped 21 basis points to 4.78 percent. The S&P 500 slipped less than 0.1 percent to 1,562.85 and the Stoxx Europe 600 Index lost 0.5 percent. The euro weakened below $1.28 for the first time since November while the pound fell as a report confirmed the U.K. economy shrank last quarter. Brazil’s real halted a six-day slump as the central bank took steps to bolster the currency.