U.S. stocks fall, Treasuries rise on budget concern; VIX surges

Market Movers

Marvell Technology Group Ltd. fell 4.5 percent after being downgraded by JMP Securities LLC. BCD Semiconductor Manufacturing Ltd. almost doubled after Diodes Inc. agreed to buy the company for $151 million.

The VIX, as the Chicago Board Options Exchange Volatility Index is known, rose 5.5 percent to 20.55 today, the highest since July. The gauge has jumped 32 percent in six days for its biggest increase since May.

Cotton, natural gas and wheat lost at least 0.8 percent to lead declines in 15 of 24 commodities tracked by the S&P GSCI Index, which slipped 0.2 percent. Crude oil fell 0.4 percent to $90.63 a barrel in New York.

The Stoxx Europe 600 Index closed up less than 0.1 percent after gaining as much as 0.3 percent. The regional benchmark has rallied 15 percent in 2012, on course for the biggest annual gain since 2009. Bankia plunged 20 percent as Spain’s bank- rescue fund said the lender has a negative value of 4.15 billion euros. Clariant AG, a Swiss chemical company, climbed 3 percent after selling units for 502 million Swiss francs ($550 million).

European Markets

In European bond markets, Italian, Spanish and Greek debt declined, while U.K. gilts and German bunds advanced. Italian 10-year yields climbed six basis points to 4.53 percent after a debt auction.

Italy sold 3.25 billion euros of zero-coupon securities maturing in 2014 to yield 1.884 percent compared with 1.923 percent Nov. 27. The sale is the first since Prime Minister Mario Monti announced on Dec. 23 that he would consider being a candidate for premier in elections on Feb. 24-25.

The MSCI Asia Pacific Index rose 0.4 percent, led by Japanese exporters and financial companies. The gauge has risen 13 percent this year. The Nikkei 225 Stock Average climbed 0.9 percent to the highest level since March 2011.

The yen was weaker against all 16 major peers tracked by Bloomberg. Japan’s consumer prices excluding fresh food fell 0.1 percent last month from a year earlier, according to the median estimate in a Bloomberg survey. That would be the sixth decline in seven months and compares with the Bank of Japan’s target of 1 percent inflation.

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