Stocks sank, dragging the Standard & Poor’s 500 Index lower for a sixth straight day, and costs to insure European government debt rose to a record after a German bund auction fueled concern the debt crisis is worsening. French and Belgian bond yields surged and commodities tumbled.
The S&P 500 lost 1.8 percent to 1,167.23 at 11:40 a.m. in New York, while the MSCI Emerging Markets Index fell for a seventh day in its longest slide since 2009. Oil retreated 2.3 percent. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments rose eight basis points to an all-time high of 378, and the euro weakened to a six-week low after Germany failed to find buyers for 35 percent of the bonds it offered at an auction. Yields on 10-year German debt climbed 22 basis points and France’s rose 15 points.
Concern that the debt crisis will weigh on the global economic recovery was amplified by data showing European services and manufacturing output shrank for a third month, while a preliminary gauge indicated China’s manufacturing contracted by the most since March 2009, according to reports by Markit Economics and HSBC Holdings Plc showed. In the U.S., durable goods orders fell and jobless claims topped forecasts.