U.S. stocks fall on debt ceiling as Treasuries advance with yen

Auction ‘Weak’

“The Italian auction was weak,” said Harvinder Sian, a senior fixed-income strategist at Royal Bank of Scotland Group Plc in London. “The issue is that it was a dealer-led affair and there wasn’t much real money buying. That -- allied to the political concerns -- means that sentiment toward Italian debt is poor.”

Yields on German 10-year bunds fell five basis points to 1.78%, their lowest level in six weeks.

Italy’s FTSE MIB Index dropped 1.3%. UniCredit SpA and Intesa Sanpaolo SpA, Italy’s two largest lenders, declined more than 1% to pace losses among lenders. Telecom Italia SpA retreated 2.6%.

The yen strengthened 0.7% to 98.27 per dollar.

Japanese Finance Minister Taro Aso told reporters today that reducing the corporate tax rate needs to be considered over a medium- to long-term perspective.

‘Little Avenue’

“The market is obviously looking at the comments by minister Aso,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce in London, in a telephone interview. “If you are concerned about shutdown risks then it probably does provide a little avenue of opportunity just to see the yen make some gains.”

West Texas Intermediate slipped 16 cents to $102.87 a barrel, capping a third straight weekly loss. The five permanent members of the UN Security Council agreed on a resolution to find and destroy Syria’s chemical weapons. The agreement does not specify how the UN will determine whether Bashar al-Assad’s regime has complied.

Gold for immediate delivery rose 1% to $1,337.38 an ounce. Silver for immediate delivery gained 0.2% to $21.77 an ounce in London trading, paring its loss this month to 7.5%. Copper added 0.7% to $7,300 a metric ton on the London Metal Exchange.

The MSCI Emerging Markets Index slipped 0.3%, trimming the gain since June to 6.3%, its best quarterly performance in a year. Turkey’s Borsa Istanbul National 100 Index lost 1.1% for a sixth straight losses.

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