May 23 (Bloomberg) -- The euro sank to an almost two-year low, while stocks and commodities tumbled, as European leaders prepared to meet in Brussels amid concern Greece will exit the currency union. The yen and dollar strengthened while German bunds and U.S. Treasuries rallied.
The euro weakened as much as 0.9 percent to $1.2570, the lowest since July 2010, as of 10:41 a.m. in New York. The MSCI All-Country World Index lost 2 percent for its biggest slide on a closing basis since March. The Standard & Poor’s 500 Index slid 1.3 percent. The yen appreciated against all 16 most-traded peers and the dollar rose versus all but the yen. The 30-year German bund yield dropped below 2 percent for the first time, while 10-year U.S. note yields lost six basis points to 1.71 percent. All 24 commodities tracked by the S&P GSCI Index fell.
European leaders are meeting today to discuss the region’s debt crisis after deepening concern Greece will exit the euro wiped about $4 trillion from equity markets worldwide this month. Japan’s exports in April trailed economists’ estimates, underscoring the risk that weakness in global demand may limit a rebound in the world’s third-biggest economy. Purchases of new homes probably rose in April, economists said before a Commerce Department report today.
“Conditions remain very fragile,” said Daphne Roth, the head of Asian-equity research at ABN Amro Private Banking in Singapore, which manages about $217 billion for clients globally. “There is a strong likelihood that Greece might exit the euro zone. Even if it stays, going forward there will be a lot of volatility,” she said in a Bloomberg Television interview.
The S&P 500 dropped for the first time in three days. Dell Inc. tumbled 15 percent after the world’s third-largest maker of personal computers forecast fiscal second-quarter revenue that missed analysts’ estimates. Hewlett-Packard Co., Microsoft Corp. and Intel Corp. fell more than 2.8 percent to lead losses in 29 of 30 stocks in the Dow Jones Industrial Average.
Equities maintained losses even after a U.S. government report showed new-home sales exceeded economists’ forecasts. Purchases rose to a 343,000 annual rate, up 3.3 percent from a revised 332,000 in March, the Commerce Department reported. The median forecast in a Bloomberg News survey of economists was 335,000. Data released yesterday showed sales of existing homes rose in April in every region.
The U.S. economy will probably tip back into recession next year if Congress doesn’t address an impending “fiscal cliff,” the Congressional Budget Office said yesterday.