Stocks Tumble For Eighth Day As Commodities Drop - Bloomberg

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Stocks Tumble for Eighth Day as Commodities Drop

Thomas Lohnes/AFP/Getty Images

Stock brokers sit in front of a board displaying German share index DAX. More than $4.5 trillion has been wiped off the value of equities worldwide since July 26.

Stock brokers sit in front of a board displaying German share index DAX. More than $4.5 trillion has been wiped off the value of equities worldwide since July 26. Photographer: Thomas Lohnes/AFP/Getty Images

Aug. 5 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks about global financial markets. Faber also discusses Federal Reserve monetary policy. He speaks from Zurich with Susan Li and John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Jan Hatzius, chief economist at Goldman Sachs Group, talks about the outlook for U.S. employment and the economy. Hatzius speaks with Erik Schatzker and Deirdre Bolton on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Barry Ritholtz, chief executive officer of FusionIQ, talks about the outlook for the U.S. economy and investment strategy. Ritholtz speaks with Michael McKee in Great Lake Stream, Maine, on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Richard Sichel, chief investment officer at Philadelphia Trust Co., talks about investor strategy. Sichel speaks with Deirdre Bolton on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- David Kotok, chairman and chief investment officer of Cumberland Advisors, talks about the global equity selloff and the outlook for the U.S. economy. Kotok speaks with Michael McKee in Great Lake Stream, Maine, on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Trevor Greetham, director of asset allocation at Fidelity International, discusses the outlook for today's U.S. July jobs report and expectations for the Aug. 9 meeting of the Federal Reserve's Federal Open Market Committee. Greetham, speaking with Maryam Nemazee on Bloomberg Television's "The Pulse," also talks about the global selloff in stocks and investment strategy. (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Henry Dixon, a fund manager at Matterley Asset Management, discusses the global equity selloff and investment strategy. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, talks about the outlook for global stocks and his investment strategy. More than $4.4 trillion have been wiped out from equity market values worldwide amid a sell-off that drove the MSCI All-Country World Index down more than 10 percent from this year’s high into a so-called correction. Mobius speaks from Tokyo with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- James Knightley, an economist at ING Bank, talks about the outlook for today's U.S. July non-farm payrolls report. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Emil Wolter, head of Asian equity strategy at Royal Bank of Scotland Group Plc, discusses the global selloff in equities and the need for a "more robust" policy response from central banks. Wolter speaks from Singapore with Linzie Janis on Bloomberg Television's "Countdown." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Peter Esho, chief market analyst at Sydney-based City Index Australia Pty, talks about Rio Tinto Group's financial results and outlook. Rio Tinto, the second-largest mining company, reported first-half profit that missed analyst estimates yesterday as costs and currency gains in Australia and Canada hurt earnings. Esho speaks from Sydney with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Geoff Lewis, Hong Kong-based head of investment services at JP Morgan Asset Management, talks about global financial markets and his investment strategy. Lewis also discusses the outlook for Federal Reserve monetary policy. He speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Aug. 5 (Bloomberg) -- Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., talks about the global economy and stock markets. A global rout in equities drove the Standard & Poor’s 500 Index to its worst slump since February 2009, while two-year Treasury yields plunged to a record low amid concern the economy is weakening. Koesterich speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

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Marc Faber

Jonathan Fickies/Bloomberg

The S&P 500 may rise 40 to 50 points as markets are now “extremely oversold,” said Marc Faber, the publisher of the Gloom, Boom & Doom report.

The S&P 500 may rise 40 to 50 points as markets are now “extremely oversold,” said Marc Faber, the publisher of the Gloom, Boom & Doom report. Photographer: Jonathan Fickies/Bloomberg

A businessman walks past an electric quotation board flashing the Nikkei index's drop at a window of a security company in central Tokyo on August 5, 2011. Tokyo shares plunged following a sharp selloff on U.S. and European markets amid worries over the American economy and the European debt crisis. Photograph: Toshifumi Kitamura/AFP/Getty Images

Asian stocks fell the most since March, set for its largest weekly rout since February 2009, the New Zealand dollar weakened for a fifth day, while oil and wheat paced losses among commodities amid concern the U.S. recovery is petering out. Photographer: Kiyoshi Ota/Bloomberg

Stocks dropped for an eighth day, the longest losing streak since January 2010, and commodities declined on concern the U.S. recovery is faltering. The Swiss franc weakened and the yen strengthened.

The MSCI All-Country World Index sank 1.3 percent at 7:35 a.m. in New York. Standard & Poor’s 500 Index futures slid 0.3 percent, after rising as much as 0.3 percent. The VStoxx Index, a measure of European stock volatility, headed toward its biggest weekly increase since May 2010. The Swiss franc depreciated against 15 of its 16 most-traded peers, while the yen gained 0.5 versus the dollar. The S&P GSCI index of 24 commodities dropped 0.2 percent.

More than $4.5 trillion has been wiped off the value of equities worldwide since July 26. Markets are “extremely oversold,” Marc Faber, publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview. The U.S. probably added 85,000 jobs last month, leaving the 9.2 percent unemployment rate unchanged, economists said before Labor Department data today that will cap a week of economic reports showing the recovery is slowing.

“Investors are coming to grips with how dramatically the global and U.S. economies have slowed in recent months,” Russ Koesterich, the San Francisco-based global chief investment strategist for the iShares unit of BlackRock Inc., said in a Bloomberg Television interview. His firm oversees $3.66 trillion as the world’s largest asset manager. “It’s not clear what steps governments can do to get us out of this.”

RBS, Allianz

The Stoxx Europe 600 Index slumped 1.3 percent, extending its loss for the week to 9.5 percent, the worst week since November 2008. Royal Bank of Scotland Group Plc fell 1.6 percent after reporting a first-half net loss that was wider than analysts had estimated. Allianz SE lost 3.8 percent after reporting second-quarter net income that missed analysts’ estimates. Both companies wrote down the value of their Greek debt holdings.

The S&P 500 index dropped 4.8 percent yesterday, the biggest decline since February 2009. The yield on the 10-year Treasury note rose almost one basis point to 2.41 percent, after it fell as low as 2.33 percent, the least since October. The two-year note yield increased two basis points after it dropped yesterday to a record 0.2527 percent. The Labor Department’s data are due at 8:30 a.m. in Washington.

Emerging Markets

The MSCI Emerging Markets Index sank 3.2 percent, the most since May 2010. Taiwan’s benchmark Taiex Index plunged 5.6 percent, the sharpest since November 2008, and the Kospi Index (KOSPI) fell 3.7 percent in South Korea. Hungary’s BUX Index lost 3.1 percent, taking it down more than 20 percent from its 2011 high, the threshold investors consider a bear market. Turkey’s ISE National 100 Index (XU100) slid 3.2 percent and Russia’s Micex Index fell 2.6 percent.

The MSCI gauge for developing nations has dropped 8.7 percent this week, its biggest weekly loss since May 2010, and is trading at a price-to-earnings ratio of 11, the lowest since March 2009.

“We’re looking at equities all the time and equities are looking better and better with all this turmoil,” Mark Mobius, who oversees about $50 billion as executive chairman of Templeton Asset Management’s emerging markets group, said in an interview on Bloomberg Television.

The Swiss franc weakened 0.8 percent to 1.0854 per euro, sliding from a record, and sank 0.6 percent versus the dollar after Swiss National Bank President Philipp Hildebrand called the currency’s strength “absurd” and said the SNB won’t exclude “further measures” to curb its gain.

Yen, Euro

The yen appreciated against all of its most-traded counterparts tracked by Bloomberg, a day after Japan sold its currency to stem gains that threaten the nation’s recovery. It was the third time the country sold its currency after six years of non-intervention that ended in September 2010.

The yen fell as much as 4.1 percent yesterday, its biggest intraday decline since October 2008.

The euro advanced 0.4 percent to $1.4152 today, paring its first weekly decline in three.

The GSCI commodities index dropped for an eighth day, the longest losing streak since December 2008. Gold climbed 1.2 percent to $1,665.57 an ounce and silver jumped 0.8 percent to $39.2325 an ounce. Oil declined 0.3 percent to $86.40 a barrel and copper slipped 1.7 percent in London.

The yield on the 10-year Italian bond dropped nine basis points to 6.10 percent after increasing as much as 20 basis points to the highest since 1997. Spain’s 10-year yield fell 26 basis points to 6.02 percent. The Portuguese yield slipped four basis points, sending the difference in yield with benchmark German bunds down nine basis points to 891 basis points.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Shiyin Chen in Singapore at schen37@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net