BlackRock Inc., the world’s largest asset manager, declined the most in more than 20 months, as stocks and bonds worldwide fell after Chairman Ben S. Bernanke said the Federal Reserve may start reducing fixed-income purchases.
BlackRock fell as much as 6.7 percent, the biggest drop since Oct. 31, 2011, and traded 5.5 percent lower at $253.80 by 11:42 a.m. in New York trading. Shares of New York-based BlackRock hit a record high of $291.69 last month.
BlackRock, which manages $3.94 trillion for clients, generates fees based on assets it oversees. Investors have been pulling money from bonds as fixed-income markets worldwide have declined on concerns the Fed will scale back its unprecedented stimulus. Clients have also been fleeing emerging-market stocks at the fastest pace in two years on the prospect of slowing economic growth.
The firm’s $21 billion iShares iBoxx Investment Grade Corporate ETF, which owns investment-grade corporate bonds, plunged as low as $112.79 today, the lowest since December 2011. BlackRock’s iShares MSCI Emerging Markets Index fell 3.3 percent today to $37.33, the lowest in almost a year.
Bernanke said yesterday the central bank could start reducing bond purchases later this year and end them in the middle of 2014 if the economy continues to improve as the central bank forecasts. The U.S. unemployment rate will fall to 6.5 percent to 6.8 percent by the end of 2014, Fed officials predicted, possibly reaching the central bank’s stated threshold to raise the benchmark lending rate.