The euro weakened, stocks extended losses into a fourth week and bonds dropped as Ireland’s 85 billion-euro ($113 billion U.S.) bailout failed to ease concern the region’s most-indebted nations will need further aid. U.S. index futures were little changed and oil advanced.
The euro depreciated against all but one of its 16 major counterparts in New York. The Stoxx Europe 600 Index fell 0.7% after advancing 0.8%, while futures on the Standard & Poor’s 500 Index fluctuated between gains and losses. The yield on Spain’s 10-year bond added 13 basis points, while Portugal’s yield climbed four basis points. The cost of insuring the countries’ debt against default jumped to records. Oil traded at the highest level in two weeks.
While National Retail Federation data showed shoppers in the U.S. spent 6.4% more than last year over the holiday weekend, investors remained concern that an agreement by European governments to rescue Ireland may not be sufficient to stem the debt crisis. Italy’s borrowing costs rose at a sale of bonds today. Declines in global stocks over the past three weeks wiped out $2.3 trillion U.S. from markets.
The euro declined 0.8% against the dollar and 0.6% per yen. It lost 0.7% versus the Swiss franc. The franc advanced against 13 of its 16 main counterparts.
The yield on Italian 10-year debt advanced 10 basis points to 4.53% as the government auctioned 6.8 billion euros of bonds due in 2013, 2017 and 2021. Credit-default swaps on Spain climbed 23 basis points to 245 while contracts on Portugal increased 40 basis points to 541, according to CMA, a data provider. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments increased two basis points to a record 190.
The extra yield investors demand to hold 10-year Irish bonds instead of benchmark German bunds was at 638 basis points, narrowing for the first time in seven days. The cost of default swaps on Irish government debt fell five basis points to 593, the first decline in more than a week, while contracts on Greece dropped 18 basis points to 954, according to CMA.
Almost three stocks fell for every one that rose in Europe’s Stoxx 600. Daimler AG, the world’s second-largest luxury carmaker, dropped 2.5%. Banco Santander SA, Spain’s biggest lender, slipped 1.1%. Bank of Ireland Plc soared 19%.
The MSCI Asia Pacific Index rose 0.8%, erasing its loss for November. Sony Corp., Japan’s biggest exporter of consumer electronics, added 2.8% as Nomura Holdings Inc. rated the stock a "buy." Nissan Motor Co., Japan’s third-largest automaker by sales, climbed 1.5%.
The gain in U.S. futures indicated the S&P 500 may trim some of last week’s 0.9% decline. Employment increased by 145,000 workers this month after a 151,000 increase in October that marked the biggest advance since May, according to the median forecast of 67 economists surveyed by Bloomberg News before the Labor Department’s Dec. 3 report. Manufacturing, the industry leading the U.S. recovery that began in July 2009, expanded in November for a 16th consecutive month, economists expect data released on Dec. 1 to show.
Equity benchmark indexes in Turkey and Hungary dropped more than 1%, leading declines in emerging Europe, while advances in Thailand and India exceeded 1% in earlier trading. The MSCI Emerging Markets Index added 0.3%, paring gains of as much as 0.7%. South Korea’s Kospi Index retreated 0.3% after President Lee Myung Bak said North Korea will be made to pay for any more provocation as his nation and the U.S. held joint military exercises.
