S&P 500 extends longest slump of year as euro weakens on Cyprus

Most U.S. stocks fell for a third day, the longest slump of the year for the Standard & Poor’s 500 Index, as Cyprus rejected a bank-deposit levy needed to secure European bailout funds. Treasuries rallied and the euro traded at a four-month low versus the dollar.

The S&P 500, which climbed to within two points of its 2007 record last week, lost 0.2% as of 4 p.m. in New York as almost three U.S. stocks fell for every two that rose. Ten-year Treasury yields slid five basis points to 1.91% and Europe’s 17-nation common currency weakened as much as 0.9% to $1.2844, the least since November. Indian stocks sank the most this month as the government’s biggest ally pulled out of the ruling coalition. Oil and gasoline slumped more than 1% to lead commodities lower.

Equities briefly pared losses after the European Central Bank said it will provide liquidity to Cyprus within existing rules. Cyprus President Nicos Anastasiades failed to secure Parliament’s support for imposing losses on depositors, a key demand of European officials in return for rescue funds. Concern about the Mediterranean island nation overshadowed growth in new U.S. home construction and a surge in building permits to the highest level in almost five years.

“Obviously the situation in Europe is not what we want it to be,” John Manley, who helps oversee about $223.6 billion as chief equity strategist for Wells Fargo Advantage Funds in New York, said in a phone interview. “The next couple weeks will be more periods of chopping around. I don’t think it’s more than 2% to 4% in terms of risk on the market,” he said. “The housing market does seem to be on a bit more steady ground and that helps U.S. consumer.”

Near Record

The S&P 500 has declined about 1% in three sessions after climbing to within two points of a record last week. Caterpillar Inc., Alcoa Inc. and American Express Co. were among the biggest declines in the Dow Jones Industrial Average, while Coca-Cola Co. and Hewlett-Packard Co. led gains. Commodity, consumer and financial shares led losses among the 10 main groups in the S&P 500.

Cliffs Natural Resources Inc. tumbled after Goldman Sachs Group Inc. reduced its forecast for iron-ore prices. AmerisourceBergen Corp. surged and Walgreen Co. jumped after agreeing to a partnership. Electronic Arts Inc. slid after the second-largest U.S. maker of video games said John Riccitiello is stepping down as chief executive officer. Lululemon Athletica Inc. tumbled after lowering its sales forecast because of a pants shortage following shipments of yoga slacks that were too sheer to wear.

An S&P index of homebuilders advanced, with KB Home and Toll Brothers Inc. pacing gains. Builders broke ground on 917,000 homes at an annual rate, up 0.8% from a revised 910,000 pace in January that was higher than initially estimated, the Commerce Department reported today. Building permits, a proxy for future construction, advanced 4.6% to 946,000, the strongest since June 2008.

Page 1 of 3 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus