Most U.S. Stocks Rise, Treasuries Retreat as Gold, Silver Plunge

AppId is over the quota
AppId is over the quota
September 23, 2011, 2:50 PM EDT By Michael P. Regan and Rita Nazareth

Sept. 23 (Bloomberg) -- Most U.S. stocks gained, halting a four-day slump, European equities rebounded and Treasuries fell amid speculation policy makers will act to prevent the debt crisis from worsening. Silver, gold and copper sank.

The Standard & Poor’s 500 Index added 0.3 percent at 1:43 p.m. New York time after plunging 7.1 percent in the first four days of the week. More than three stocks gained for every two that fell on U.S. exchanges. The Stoxx Europe 600 Index rose 0.6 percent after tumbling 2.6 percent. Ten-year Treasury yields increased eight basis points to 1.80 percent after falling to a record low of 1.67 percent. Silver plunged as much as 18 percent to extend its worst two-day slide in 31 years, and gold and copper retreated more than 6 percent.

Europe’s governments are speeding the setup of a permanent rescue fund, an internal working paper shows. The European Central Bank may step up efforts to ease financial-market tensions, including offering banks 12-month loans, Governing Council members said. About $3.5 trillion had been erased from global equity values this week before today, driving the MSCI All-Country World Index into a bear market and price-earnings ratios down to the lowest levels since March 2009.

“You’d expect to see some stability after an aggressive selloff, but it’s Friday and the question is: do investors want to go long over the weekend?” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $48 billion, said in a telephone interview. “The ECB is saying good things, but the market is looking for more tangible steps.”

Stability Mechanism

Stocks drifted between gains and losses for most of the day before heading higher after a staff paper obtained by Bloomberg News showed that senior European finance officials next week will examine the cost advantages of creating the rescue fund, known as the European Stability Mechanism, in July 2012, a year ahead of schedule. The fund will have 500 billion-euros ($677 billion) that could help shield countries like Italy and includes provisions for sharing costs with bondholders for countries with “unsustainable” debt.

Group of 20 officials said after talks in Washington that they were “committed to a strong and coordinated international response to address the renewed challenges facing the global economy.” U.S. stocks tumbled this week after the Federal Reserve said there were “significant downside risks” to gross domestic product. The S&P 500 has fallen 17 percent since April 29 amid concern about a global economic slowdown.

Benchmark measures for 32 out of the 45 nations in the MSCI All-Country World Index have posted 20 percent declines from their respective peaks, meeting the common definition of a bear market, according to data compiled by Bloomberg. The MSCI gauge passed that threshold yesterday, extending its slump since May 2 to 22 percent. Among the countries with the 20 biggest losses from their highs, 18 are located in Europe. The exceptions are Hong Kong and Brazil.

Financials Lead Gains

All 10 of the main industry groups in the S&P 500 rose, with financial firms and companies that rely on discretionary consumer spending climbing more than 1 percent to lead gains. Ford Motor Co. rallied 3.2 percent after saying U.S. sales of pickups are at their highest pace since December.

The S&P 500 is trading for 12.4 times earnings in the last 12 months, within 2 percent of a low of 12.2 reached Aug. 8, data compiled by Bloomberg show. The ratio would have to narrow another 18 percent to match its level on March 9, 2009, the start of the bull market in which the gauge rose as much as 102 percent, the data show.

Valuations

The price-earnings ratio as of yesterday was 5.1 percent below the S&P 500’s average valuation of 13 at its lowest point in the last nine bear markets, data compiled by Bloomberg show. To reach the lowest of those, 7 on June 21, 1982, the index would have to fall 43 percent to about 640, based on profit in the last 12 months of $91.41 a share.

Gold futures fell as much as $110 to $1,631.70 an ounce as some investors sold the metal to cover losses in other assets. Silver tumbled as much as 18 and extended its two-day slump to 26 percent, the most since 1979. The S&P GSCI Index of commodities slumped 1.1 percent to the lowest level on a closing basis in almost 10 months.

European stocks erased losses as Societe Generale SA and BNP Paribas SA, France’s biggest banks, climbed more than 8.7 percent to lead a rally in financial shares. The Stoxx Europe 600 Index declined to the lowest level since July 2009 yesterday, extending the loss from this year’s high on Feb. 17 to 26 percent. The index lost 6.1 percent this week, the most since Aug. 5.

European Lending

A measure of banks’ reluctance to lend to one another in Europe rose for a third day to the highest since March 2009. The Euribor-OIS spread, the difference between the three-month euro interbank offered rate and overnight index swaps, climbed to 89 basis points as of 5:10 p.m. in London, from 85 yesterday, Bloomberg data show.

Money-market mutual funds reduced lending to European banks further last month, with the biggest U.S. funds cutting their holdings to the lowest in at least five years, as the region’s sovereign debt crisis worsened. The 10 biggest U.S. funds eligible to purchase corporate debt, with a combined $676 billion, reduced European bank assets to 42 percent of holdings, the lowest level since at least 2006, Fitch Ratings said today in a report.

Among European bonds, yields on Italian and Spanish debt fell, while rates on U.K., French and German debt increased. Greece’s two-year yield surged 317 basis points, or 3.17 percentage points, to 69.69 percent.

The MSCI Emerging Markets Index slumped 1.8 percent and is down 11 percent over five days, set for its biggest weekly loss since 2008. South Korea’s Kospi Index tumbled 5.7 percent for the biggest drop among global equity gauges, while Russia’s Micex Index fell 4.5 percent.

--With assistance from Michael Patterson and Stephen Kirkland in London, Whitney Kisling and Chris Nagi in New York and James G. Neuger in Brussels. Editors: Michael P. Regan, Nick Baker

To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

View the original article here

Peliculas Online

Posted in: Plunge,Retreat,Silver,stocks,Treasuries