BLBG: Commodities Fall as Dollar, Treasuries Gain, Stocks Fluctuate
By Michael P. Regan and David Merritt
March 9 (Bloomberg) -- Commodities fell, the dollar strengthened and Treasuries advanced amid speculation that a yearlong rally in riskier assets overshot prospects for the global economic recovery.
Crude oil declined as much as 2.1 percent after reaching an eight-week high near $82 a barrel yesterday. The Dollar Index, which gauges the U.S. currency against six major trading partners, climbed 0.3 percent to 80.648. The yield on the benchmark 10-year Treasury note slipped 2 basis points to 3.7 percent before today’s record-tying $40 billion auction of three-year notes. The Standard & Poor’s 500 Index drifted between gains and losses on the anniversary of its 12-year low last year.
European shares fell after European Aeronautic, Defence & Space Co., owner of planemaker Airbus SAS, posted a wider-than- estimated annual loss and copper producer Antofagasta Plc’s full-year profit plunged 61 percent. The results highlighted the risks still associated with the economic recovery, one year after the S&P 500 started its biggest rally since the Great Depression amid record low interest rates and more than $12 trillion committed by governments to revive growth.
“The global economy is far from equilibrium,” said Tim Brunne, a credit strategist at UniCredit SpA in Munich. “Risky assets” are being supported by “ample liquidity and low interest rates.”
Telephone shares in the S&P 500 climbed 1.2 percent collectively for the top advance among 10 groups, while producers of raw materials lost 0.4 percent for the biggest drop.
Yearlong Rally
The S&P 500 is up 68 percent since hitting a 12-year low of 676.53 one year ago today, the biggest rally for the index since the Great Depression. The main benchmark for American equities is still down about 1 percent from this year’s high amid concern about some European countries’ ability to pay back debt and as investors speculated the Federal Reserve will need to rein in emergency stimulus measures as the economy improves.
The MSCI World Index of 23 developed nations’ stocks fell 0.2 percent. About two shares fell for each that rose on the Stoxx Europe 600 Index, which dropped 0.2 percent. The gauge has rallied 62 percent since its 12-year low a year ago. EADS plunged 2.6 percent in Paris after plunging as much as 6 percent, its biggest drop on a closing basis since May. Declines were limited as Nestle SA, the world’s biggest food company, rose 1.3 percent in Zurich after JPMorgan Chase & Co. raised its recommendation on the stock to “overweight” from “neutral.”
Asian Shares
Most Asian stocks fell, even as the MSCI Asia Pacific Index gained 0.1 percent. Fujitsu Ltd. declined for a second day in Tokyo, slumping 3.9 percent after altering its explanation for the resignation of its former president.
The yen rose 0.9 percent to 122.08 per euro and appreciated 0.5 percent to 89.89 against the dollar. The German bund yield fell 4 basis points to 3.12 percent.
The 10-year Greek yield increased two basis points to 6.25 percent, with the premium investors demand to hold the securities instead of bunds widening 6 basis points to 312 basis points, according to Bloomberg generic yields.
Greek Prime Minister Minister George Papandreou will press U.S. President Barack Obama to help Europe combat “unprincipled speculators,” who he said have roiled markets and threaten a new global financial crisis. Papandreou, struggling to convince investors his government is serious about taming Europe’s biggest budget deficit, meets Obama and Treasury Secretary Timothy F. Geithner today in his first U.S. visit since being elected in October.
Emerging Markets
The MSCI Emerging Markets Index lost 0.1 percent, its first decline in three days. Abu Dhabi’s ADX index gained 0.7 percent and Dubai’s DFM General Index advanced 0.8 percent on speculation Dubai World, the state-owned holding company in talks to renegotiate about $26 billion of debt, is making progress in the talks.
Crude oil for April delivery dropped 0.6 percent to $81.35 a barrel in electronic trading on the New York Mercantile Exchange as analysts forecast an industry report later today will show a weekly increase in U.S. crude supplies.
The S&P GSCI Index of commodities slumped 0.7 percent, its first drop in three sessions.
To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; David Merritt in London on dmerritt1@bloomberg.net.
