European stocks fell for a fourth day and oil declined amid concerns the global economic recovery was faltering. Treasuries dropped, while US equities were little changed after a five-week slide left the Standard & Poor’s 500 Index trading at its cheapest earnings valuation of the year.
The Stoxx Europe 600 Index declined 0.3 per cent at 9:40 am in New York. The S&P 500 slipped less than 0.1 per cent to 1,299.04. Oil retreated before OPEC ministers meet this week in Vienna. The yen strengthened against 13 of its 16 major peers, adding 0.1 per cent versus the dollar. Ten-year Treasury yields rose five basis points to 3.04 per cent.
More than $2 trillion has been erased from the market value of global equities since this year’s peak on May 1, amid disappointing economic data, capped by last week’s US jobs report.
The S&P 500 has retreated almost five per cent from a nearly three-year high at the end of April, leaving the index trading at 12.3 times estimated earnings, the lowest valuation since September, according to data compiled by Bloomberg.
“Since peaking in early May, markets have steadily moved lower as the constant stream of weak data points to a slowing global recovery,” said Jonathan Sudaria, a trader at London Capital Group. “The debate amongst traders is whether this is a mere correction in the 2 1/2-year bull market or are fundamental weaknesses lining up to push markets significantly lower.”
The Stoxx 600 dropped below its lowest closing level since March 22. Unione di Banche Italiane ScpA and Societe Generale led a gauge of banks to the biggest drop among 19 industry groups, each falling more than two per cent.
Air France-KLM Group and Deutsche Lufthansa AG, Europe’s largest airlines, slipped at least 1.2 per cent after a trade group cut the industry’s profit forecast for 2011.
