July 6 (Bloomberg) -- Stocks and commodities fell, while Treasuries rose for a second day, after slower-than-forecast growth in U.S. payrolls fueled concern the economic recovery is slowing. Spain’s 10-year bond yields reached 7 percent.
The Standard & Poor’s 500 Index slipped 0.7 percent at 9:31 a.m. in New York and the Stoxx Europe 600 Index lost 0.8 percent. Treasury 10-year yields fell four basis point to 1.55 percent. Spain’s 10-year yield climbed as much as 26 basis points to 7.04 percent, while the yield on German two-year notes slid below zero. Three-month Euribor, or the rate European banks say they see each other lending in euros, fell to an all-time low. Oil lost 2.8 percent and corn declined 2 percent.
Global equities extended losses this morning after U.S. Labor Department data showed payrolls increased 80,000 last month, less than a 100,000 gain forecast in a Bloomberg survey. The European Central Bank yesterday reduced its benchmark rate to a record low of 0.75 percent and the People’s Bank of China cut borrowing costs for a second time in a month.
“There is weakness around the world,” Stephen Roach, a professor at Yale University and former non-executive chairman for Morgan Stanley in Asia, said in an interview on Bloomberg Television. “When you are at extremely low levels of policy interest rates, you can’t expect that that’s going to jump-start the economy.”
Today’s labor report showed the unemployment rate held at 8.2 percent. Private employment, which excludes government agencies, increased 84,000 in June, the weakest in 10 months.
The government’s previous employment report on June 1 showed 69,000 jobs were created in May, the weakest growth in a year, and sent the S&P 500 down 2.5 percent for its biggest drop of 2012. Ten-year Treasury yields reached a record low of 1.4387 percent that day. The S&P 500 has rallied 7 percent since then and 10-year rates have increased.
The rebound in equities came after a 9.9 percent tumble from a four-year high in April dragged the S&P 500 to 12.9 times reported earnings, the cheapest level since November. Alcoa Inc. is scheduled to unofficially start the second-quarter earnings season when it releases results on July 9.
Analyst estimates compiled by Bloomberg project a 1.8 percent decline in profits for S&P 500 companies in the April- June period, which would mark the first year-over-year decrease since 2009, even as revenue increased 2.5 percent.
Earnings at energy companies fell 16 percent to lead the decline among the 10 main groups in the S&P 500, the estimates show, followed by a 12 percent decrease in profits at raw- material producers. Crude oil tumbled 18 percent in the second quarter to drag the S&P GSCI Index of commodities down 13 percent, the worst declines for both since the final three months of 2008.
Three shares fell for every one that advanced in the Stoxx 600. Spain’s largest banks, Santander SA and Banco Bilbao Vizcaya Argentaria SA, fell at least 3.9 percent. Industrial production decreased for the ninth month in May, the National Statistics Institute in Madrid said.
A gauge of carmakers posted the biggest slide of the 19 industry groups on the Stoxx 600 after PSA Peugeot Citroen reported that first-half deliveries dropped 13 percent from a year earlier and its share of the European market declined. The region’s second-biggest carmaker tumbled 7.2 percent.
The euro slipped 0.5 percent to $1.2327, leaving it 2.7 percent lower this week, the worst drop of the year. The rate on German two-year notes was at minus 0.008 percent.
The euro interbank offered rate, or Euribor, for three- month loans was 0.549 percent, compared with 0.641 percent yesterday, European Banking Federation data showed.