European stocks declined from a six- month high and the euro weakened against the dollar on concern that Greece’s debt crisis will persist even after a second bailout. U.S. equity futures pared gains while Treasuries fell.
The Stoxx Europe 600 Index lost 0.7 percent at 6:50 a.m. in New York. Standard & Poor’s 500 Index (SPX) futures added 0.1 percent, after gaining as much as 0.7 percent. The euro depreciated 0.3 percent to $1.3204, reversing a 0.4 percent advance. Spanish bonds rose as the government met its maximum target at a bill auction. The 10-year U.S. Treasury yield increased four basis points to 2.04 percent. Copper increased for a second day.
European finance ministers approved 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default. Greece’s debt may still balloon to 160 percent of gross domestic product in a worst-case scenario, analysis by the International Monetary Fund and European officials indicated.
“You can’t really go out and say that we’ve solved the whole euro-zone debt crisis and this won’t come back to bother us again,” Manpreet Gill, a senior investment strategist at Standard Chartered Plc, said in a Bloomberg Television interview from Singapore. “These issues will still simmer over time.”
Five shares fell for every one that advanced in the Stoxx 600. Segro Plc, the U.K.’s largest publicly traded owner of industrial properties, sank 2 percent after saying net asset value declined 9.8 percent. Fresenius Medical Care AG (FME), the world’s biggest provider of kidney dialysis, dropped 1.3 percent as its 2012 sales forecast missed analyst estimates.
Highest Since April
The S&P 500 climbed to the highest level since April on Feb. 17. The two-year Treasury yield was little changed at 0.29 percent before the government sells $35 billion of the securities, the first of three auctions this week totaling $99 billion.
The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, fell 0.3 percent. The Australian dollar weakened its 16 major counterparts, losing 0.8 percent versus its U.S. currency after minutes of the nation’s central bank’s most recent policy meeting showed there is scope for monetary easing.
The yield on the German 10-year bund, Europe’s benchmark government security, climbed two basis points, rising for the fourth straight day. The yield on the Spanish two-year note declined six basis points as the government sold 2.5 billion euros of three- and six-month bills. The yield on the 10-year Italian bond dropped 10 basis points, driving the extra yield investors demand to hold the securities instead of bunds 12 basis points lower.
Copper advanced 1.2 percent after rising 0.7 percent yesterday. Gold climbed 0.2 percent to $1,739.05 an ounce and silver advanced 0.7 percent.
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February 21, 2012
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