Stocks drop with commodities while U.S. Treasuries, dollar rise

‘Number One Issue’

“The impacts of the potential cliff are already being felt,” Moynihan said at a Bank of America conference today. In a survey of chief financial officers, “the number one issue they see is the fiscal cliff. They tell us it’s affecting their business plan. That uncertainty continues to hold back the recovery. Simply put, our clients tell us they will not be aggressive in times of uncertainty.”

Technology and financial shares led declines among the 10 main industries in the S&P 500 today. Microsoft Corp. slumped as Steven Sinofsky, a 23-year veteran who ran the Windows division, left the company. JPMorgan Chase & Co. and PNC Financial Services Group Inc. paced losses in banks. AK Steel Holding Corp. slid as it forecast a wider-than-expected fourth-quarter loss with a decline in prices for the last three months of the year.

A gauge of retailers in the S&P 500 had the biggest gain among 24 groups as Home Depot jumped to the highest price since 2000.

Commodities Slip

Coffee, heating oil and Brent crude oil lost at least 0.9 percent to lead declines in 14 of 24 commodities in the S&P GSCI Index. New York-traded oil slipped 0.2 percent to $85.38 a barrel after the International Energy Agency reduced demand estimates and U.S. inventories were forecast to reach a three- month high. Coffee futures tumbled the most since July, losing 4.4 percent, on signs of abundant global supplies.

Natural gas surged to a one-year high in New York, rising 4.7 percent to $3.739 per million British thermal units, on speculation that U.S. inventories will drop for the first time this season as below-normal temperatures spur fuel demand.

The dollar and yen rose versus most major peers after euro- area policy makers gave Greece two extra years to lower its budget deficit. The euro touched two-month lows against the dollar and Swiss franc as European finance ministers struggled to agree on how to provide additional aid for Greece. Brazil’s real weakened against 13 of 16 major peers on bets the central bank will continue to intervene.

European Markets

The Stoxx Europe 600 Index finished 0.4 percent higher, reversing a 0.8 percent drop. Italian and Spanish lenders rallied as Intesa Sanpaolo SpA jumped 5.2 percent after reporting that operating profit surged in the third quarter. EON AG slumped 12 percent after Germany’s biggest utility lowered its earnings forecast for 2013. Vodafone Group Plc slid 2.5 percent after the world’s second-largest mobile-phone company took a $9.4-billion writedown for its operations in Spain and Italy.

Ten-year Spanish yields fell four basis points to 5.85 percent on speculation the nation will ask for a bailout.

“There are rumors that a bailout for Spain is imminent and that has pushed bond yields down,” said Arnaud Scarpaci, a fund manager at Agilis Gestion SA in Paris, which oversees about $77 million. “That explains the violent rebound in stocks.”

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