Europe Stocks Drop With Italy Bonds as China Equity Rout Deepens

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U.S. stocks were mixed as semiconductor shares tumbled after a disappointing forecast from a memory-chip maker, while Nike Inc. boosted large caps. Treasuries fell with European bonds as Greece remained deadlocked with creditors on a bailout.

The Standard & Poor’s 500 Index slipped less than 0.1 percent at 4 p.m. in New York. The Nasdaq 100 Index slid 0.7 percent, while the Dow Jones Industrial Average added 0.3 percent. Bond markets from Germany to the U.S. showed optimism a Greek deal would be reached, with 10-year Treasury rates rising to a two-week high. The euro fell to $1.1167.

Greece was said to reject creditors’ offer to unlock aid for the indebted country as euro-area finance chiefs prepare to meet again on Saturday to try to hammer out an agreement. FTSE Russell’s index reconstitution touched off a frenzy of trading, with some 4 billion shares changing hands in the final 10 minutes of trading.

“The story continues with Greece, and investors are waiting to see what happens there,” Stephen Carl, principal and head equity trader at Williams Capital Group LP, said by phone.

Russell Rebalance

About $5.7 trillion is benchmarked to Russell indexes worldwide, including $800 billion in passive products such as exchange-traded funds. Volume on U.S. exchanges spiked past 10 billion for the busiest trading session of the year.

Saturday’s meeting on Greece will mark the fifth time finance chiefs in the currency union have met to discuss Greece in a week. French President Francois Hollande said Thursday there were still prospects a deal could be done, while Angela Merkel said negotiations had “regressed a bit.”

Assets from bonds to currencies and equities have fluctuated as hopes of a deal have been raised and dashed repeatedly during the week.

The S&P 500 rose within 0.3 percent of a record earlier this week before erasing the advance. The guage capped its longest streak since 1993 without posting a move of more than 1 percent.

Nike, Semiconductors

Data showed consumer confidence climbed in June to a five-month high as an improving job market boosted Americans’ attitudes about the world’s largest economy.

Nike rose 4.3 percent to a record after quarterly results were boosted by new products and market-share gains. Micron Technology sank 18 percent after its sales forecast missed projections. Intel Corp. lost 3 percent to a March low.

The Stoxx Europe 600 gained 0.1 percent, whipsawing from a loss of 0.8 percent to a gain of 0.5 percent as Greece and creditors swapped plans to resolve the monthslong standoff. index capped a 2.9 percent weekly gain. Greece’s ASE Index rose 2 percent Friday, the best performer among western-European markets.

Spain’s 10-year securities had their biggest weekly gain in four months, and benchmark German bunds extended declines.

The yield on 10-year German bunds jumped six basis points to 0.92 percent, while similar-maturity Treasury note rates added seven basis points to 2.47 percent, the highest in two weeks.

The dollar capped its biggest weekly advance since May amid a growing conviction that U.S. economic growth will prompt an interest-rate increase from the Federal Reserve this year. The Bloomberg Dollar Spot Index climbed 1.2 percent, the most since May 22.

The MSCI Emerging Markets Index fell 0.8 percent, trimming a 0.6 percent gain this week. The measure is down 2.6 percent in June after falling for five straight weeks.

Oil ended below $60 a barrel in New York as near-record U.S. production prolonged an oversupply.

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