Commodities, Treasuries gain as S&P 500 slides for fifth session

Commodities halted a four-day slump as reports showed American new-home sales and durable-goods orders grew. U.S. stocks headed for the longest slump of the year and Treasuries rose as investors watched budget negotiations in Washington.

The S&P GSCI Index of 24 raw materials advanced 0.6% at 10:15 a.m. in New York as energy and precious metals led gains. The Standard & Poor’s 500 Index fell for a fifth day, losing 0.2% to 1,693.33, and the Stoxx Europe 600 Index slipped 0.3%. Benchmark 10-year Treasury (CBOT:ZNZ13) yields fell one basis point to 2.64% after reaching the lowest level in six weeks. Japan’s currency rose against 11 of its 16 major counterparts after earlier strengthening versus all 16.

Treasury Secretary Jacob J. Lew said yesterday that investor confidence that a deal can be struck to raise the U.S. debt limit is “a bit greater than it should be.” Commerce Department data showed demand for durable goods, items meant to last at least three years, rose 0.1% in August after plunging 8.1% in July and purchases of new homes climbed 7.9% to a 421,000 annualized pace. A Bloomberg National Poll showed Americans are losing faith in an economic recovery.

“While it’s likely that the U.S. will reach a budget deal in the end, the uncertainty surrounding it in the meantime has fueled risk aversion,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London.

Market Summit

Lew, who spoke at the Bloomberg Markets 50 Summit in New York yesterday, said the government probably will have less than $50 billion in cash by mid-October. Twenty-seven% of poll respondents anticipate improvement in the U.S. economy’s strength over the next year, down from 39% in the last survey in June, according to a Bloomberg National Poll.

The S&P 500 retreated 1.6% over the previous four sessions. Among stocks moving today, Stryker Corp. slipped 1.9 after agreeing to buy Mako Surgical Corp. for $1.65 billion. Carnival Corp. retreated 4.3% as analysts cut their recommendations after the world’s largest cruise-ship operator forecast a possible quarterly loss. Noble Corp. added 2.9% after saying it plans to spin off about half its fleet.

About three stocks fell for every two that rose on the Stoxx Europe 600 Index. Carnival Corp., the cruise-ship operator that yesterday forecast results that trailed analysts’ estimates, tumbled 6.1% in London trading as brokerages from Morgan Stanley to Natixis downgraded the shares. Nordea Bank AB slid 2.8% as Sweden sold its remaining 7% stake in the bank for 21.6 billion kronor ($3.4 billion).

The yield on 10-year Treasury reversed its decline after earlier decreasing to 2.63%, the lowest since Aug. 13. The yen rose less than 0.1% to 98.70 per dollar, appreciating for a fourth successive day. The U.S. currency weakened 0.2% to $1.3497 per euro. The euro was up 0.1% at 133.21 yen.

Krone, Rupiah

The Norwegian krone slid against all 16 major peers after a report showed unemployment rose to 3.6% in July from a revised 3.4% the previous month. It weakened 1% to 6.03136 per dollar and fell 1.1% to 8.14332 per euro. Sweden’s krona declined versus 14 of 16 major peers as a gauge of consumer confidence missed analyst estimates. The krona dropped 0.5% to 6.435 per dollar.

New Zealand’s dollar weakened after the nation’s trade deficit unexpectedly widened. It fell 0.5% to 82.42 U.S. cents, after a 1.1% slide yesterday that was the biggest loss in a month.

The S&P GSCI Index rallied following a four-day, 2.1% drop. West Texas Intermediate crude rose 0.4% to $103.56 a barrel after sliding almost 5% over the past four sessions before U.S. data today that’s forecast to show crude stockpiles in the nation dropped 1 million barrels.

Copper for three-month delivery climbed for the first time in four days, gaining 0.5% to $7,184.75 a metric ton on the London Metal Exchange. Aluminum was little changed at $1,797 a ton, and zinc added 0.4% to $1,883 a ton.

Soybeans climbed for a second day, adding 0.4% to $13.1775 a bushel in Chicago on speculation that rain in the U.S. Midwest won’t be enough to bolster crop conditions. Wheat gained 0.7% and corn rose 0.5%.

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