By Nick Baker and Sapna Maheshwari Nov. 24 (Bloomberg) -- Stocks fell around the world after Americans spent less than economists forecast and investors speculated banks need to raise more capital. Oil dropped, and gold rose for the 16th time in 17 days. The MSCI World Index of stocks in 23 developed nations lost 0.4 percent to 1,161.38 at 10:45 a.m. in New York. The Shanghai Composite Index plunged 3.5 percent, the most since August, as China’s five biggest banks submitted capital-raising plans to regulators, according to four people with knowledge of the matter. The Dow Jones Industrial Average retreated from a 13- month high. JPMorgan Chase & Co. and HSBC Holdings Plc helped send financial companies to the largest decline among 10 industries in the MSCI equity index. The U.S. economy expanded at a 2.8 percent annual rate in the third quarter, less than the government reported last month, reflecting a smaller gain in consumer spending and a bigger trade deficit, according to Commerce Department data released today. Consumer spending, which accounts for about 70 percent of the economy, rose at a 2.9 percent pace, compared with the 3.2 percent rate that was the median forecast of economists. “The consumption numbers came in a little lighter than expected,” said Michelle Clayman, chief investment officer at New Amsterdam Partners in New York, which manages $3 billion. “That says, ‘OK, the consumer has come back from total hibernation, which is where they were earlier this year, to spending again, but it’s still nothing huge.’” Most Since 1980 Personal consumption has rebounded after declining 3.5 percent in the third quarter of 2008, the most in the U.S. since 1980. The nation’s gross domestic product expanded in the July- through-September period after shrinking for a year. Financial institutions in the MSCI World slumped 1.2 percent, the most among 10 groups. The MSCI Emerging Markets Index fell 0.8 percent, led by China’s retreat, while Russia’s Micex Index retreated 2.3 percent on oil’s decline. U.S. stocks erased their advance following the report on consumer spending. The Standard & Poor’s 500 Index lost 0.1 percent to 1,105.57 and the Dow average slipped 20.56 points, or 0.2 percent, to 10,430.39 as JPMorgan decreased 1.6 percent. “There are a lot of people that have a very itchy trigger finger on any economic data,” said Marc Harris, co-head of global research at RBC Capital Markets in New York. “If we don’t begin to see the consumer coming back, we’ve got a problem on our hands.” Crude oil for January delivery fell 1.7 percent to $76.24 a barrel in New York. The U.S. Energy Department will report tomorrow that crude-oil supplies grew by 1.5 million barrels in the week ended Nov. 20, according to the average estimate in a Bloomberg News survey. The fuel has surged 71 percent in 2009. Gold for December delivery added 0.4 percent to $1,169.50 an ounce in New York. The precious metal has surged 32 percent in 2009 for the ninth straight annual advance. To contact the reporters on this story: Nick Baker in New York at nbaker7@bloomberg.net; Sapna Maheshwari in New York at smaheshwar11@bloomberg.net.

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