Treasuries fall as commodities gain; Dow retreats from record

Treasuries fell and commodities gained as faster-than-forecast growth in U.S. retail sales bolstered optimism in the world’s largest economy. U.S. equities retreated after the Dow Jones Industrial Average reached record for a sixth straight day.

Ten-year Treasury yields increased two basis points to 2.03% at 9:44 a.m. in New York and the S&P GSCI Index of commodities increased 0.2%. Crude oil gained for a fifth day in New York. The Dow and the Standard & Poor’s 500 Index each lost 0.2%. The Stoxx Europe 600 Index was down less than 0.2% after sliding 0.5% earlier. Chinese shares slid to a two-month low.

Commerce Department data showed sales at U.S. retailers rose 1.1% in February, the most in five months and more than twice the median estimate of economists. Industrial production declined 0.4% in January in the 17-nation euro area, exceeding a 0.1% decline forecast by economists, and adding to signs that the region’s recession extended into the first quarter.

“The economy continues to do OK, the consumer continues to spend,” David Katz, who oversees about $825 million as chief investment officer at New York-based Matrix Asset Advisors Inc., said in a phone interview. “You have a favorable environment for stocks and the economy, and as a result you’ve had a nice upward bias. Various data points have helped move the stock market higher.”

Among U.S. stocks, Oracle Corp. gained after Canaccord Genuity Corp. upgraded the software maker. Coach Inc. advanced as Citigroup Inc. raised its rating. Spectrum Pharmaceuticals Inc., a maker of cancer medicines, plunged after saying sales will miss analysts’ estimates.

Adecco Miss

The Stoxx 600 has retreated this week after climbing to a 4 1/2-year high on March 8. Adecco SA, the world’s biggest supplier of temporary workers, lost 1.1% today after fourth-quarter profit missed analyst estimates. Enel SpA sank 5.3% as Italy’s largest utility said earnings tumbled 79% last year and won’t recover until 2017. Prudential Plc advanced 5.1% as the U.K.’s biggest insurer by market value raised its dividend and reported income that beat projections.

Italian 10-year bonds fell after 7 billion euros ($9 billion) of debt sales and Spain’s securities ended a run of 10 straight gains.

Italy’s 10-year bond yield rose 10 basis points to 4.70% and Spain’s rose three basis points to 4.76%. As well as the Italian auction today, Germany sold 4.3 billion euros of two-year notes, Britain issued 1.5 billion pounds ($2.2 billion) of 2052 securities and Ireland is selling 5 billion euros of 10-year bonds via banks.

In Japan, a lack of unity among lawmakers for nominees to run the central bank damped speculation for accelerated monetary easing. Retail sales in the U.S. probably rose in February for a fourth consecutive month, a report later today is predicted to show.

Bullish bets on Japan’s currency in the options market climbed to a nine-month high after the largest opposition party said yesterday it would vote against BOJ deputy governor nominee Kikuo Iwata, an advocate of quantitative easing.

The yen erased gains versus the dollar after strengthening as much as 0.7% 95.45 per dollar, after reaching 96.71 yesterday, the weakest level since August 2009. It appreciated 0.3% to 124.79 per euro. Europe’s shared currency weakened 0.4% to $1.2981.

Property shares slumped in Hong Kong and China on concern policy makers will step up curbs after reported the city of Shenzhen banned developers from raising home prices.

“Property curbs and the central bank’s possible attitude towards tightening liquidity make investors nervous,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “There’s concern the economic recovery will falter.”

West Texas Intermediate crude climbed 0.8% to $92.23 a barrel, near to a two-week high. Lead, gasoline and natural gas also increased more than 0.5% to lead gains in commodities.

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