U.S. stocks fall for fifth day, Treasuries gain as cliff looms

Benchmark U.S. 10-year Treasuries are heading for the first weekly gain in a month. The securities lagged behind stocks this year by the most since 2009, with equities returning eight times more than bonds.

An S&P gauge of homebuilders lost 0.9 percent even after better-than-forecast growth in home sales. The index of pending home sales climbed 1.7 percent to 106.4, the highest reading since April 2010, after a revised 5 percent gain in October, the National Association of Realtors reported today in Washington. The median forecast in a Bloomberg survey called for a 1 percent advance.

The MNI Chicago Report’s business barometer rose to 51.6 in December from 50.4 the prior month, above the reading of 50 that is the dividing line between expansion and contraction and higher than the median estimate of economists for 51.

The Stoxx 600’s decline trimmed its 2012 advance to 14 percent, the largest annual increase since 2009. The number of shares changing hands today was 27 percent less than the 30-day average, according to data compiled by Bloomberg.

Bankia SA plunged 23 percent to the lowest price since its initial share sale in July 2011 as the bank was temporarily excluded from Spain’s benchmark IBEX 35. Porsche SE surged 6.3 percent to the highest in almost two years after an appeals court ruling dismissed a lawsuit by hedge funds that accused the German carmaker of concealing a plan to corner the market in Volkswagen AG shares.

The MSCI Asia Pacific Index advanced 0.6 percent. Government reports today showed Japan’s industrial output slid 1.7 percent last month from October, worse than all 27 estimates in a Bloomberg News survey that had a median forecast of a 0.5 percent decline. The data bolstered the case for Prime Minister Shinzo Abe to push for further monetary easing. Consumer prices excluding fresh food fell 0.1 percent in November from a year earlier.

Abe’s cabinet is working on a plan to fight against a strong yen, the Nikkei newspaper said. Proposals include the use of currency intervention when needed, the paper said.

The cost of insuring against a corporate default increased in Europe. The Markit iTraxx Crossover Index of credit-default swaps on 50 mostly junk-rated companies rose 12 basis points, paring its first annual rally since 2009.

The yield on Italian 10-year bonds was little changed at 4.53 percent as the country sold 5.9 billion euros ($7.8 billion) of five- and 10-year government securities. Investors bid for 1.47 times the amount of the 10-year debt offered, up from 1.18 times on Nov. 29. The yield had earlier increased as much as 4 basis points.

The MSCI Emerging Markets Index advanced 0.5 percent to extend this year’s increase to 15 percent. China’s Shanghai Composite Index rallied 1.2 percent to the highest since June 21. The BSE India Sensitive Index added 0.6 percent, heading for its best year since 2009. Vietnam’s VN Index jumped to the highest since August, capping its largest weekly gain since February. Russia’s Micex Index fell 0.2 percent.

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