Stocks, commodities slide as Treasuries gain; euro at two-year low

July 6 (Bloomberg) -- Stocks and commodities sank, while Treasuries rose for a second day, as slower-than-forecast growth in U.S. payrolls fueled concern the economic recovery is slowing. The dollar strengthened against 14 of 16 major peers, with the euro setting a two-year low of $1.2266.

The Standard & Poor’s 500 Index slid 1.2 percent to 1,350.6 at 2:53 p.m. in New York, sending it lower for the week. Treasury 10-year yields fell six basis points to 1.54 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 fell 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, natural gas and wheat lost more than 3 percent to help lead commodities lower.

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.”

Alcoa Inc., Hewlett-Packard Co., Caterpillar Inc., United Technologies Corp. and International Business Machines Corp. lost at least 2.5 percent to lead declines in the Dow Jones Industrial Average.

Technology Shares

Informatica Corp. slumped 29 percent, the most in 11 years, after the software provider reported second-quarter earnings and revenue that missed analysts’ estimates. Technology companies fell 2.4 percent as a group, the most among 10 industries in the S&P 500, and made up the 10 biggest declines in the S&P 500. Teradata Corp. and Citrix Systems Inc. sank more than 8 percent.

Today’s losses left the S&P 500 down almost 1 percent for the week. The labor report showed the unemployment rate held at 8.2 percent. Private employment, which excludes government jobs, increased 84,000 in June, the weakest in 10 months. Today’s data is the last monthly report before the Federal Reserve’s next policy meeting. The Federal Open Market Committee is scheduled to releases its statement on monetary policy and the economic outlook on Aug. 1.

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