U.S. Stocks Slump as Europe Bond Risk Climbs. By Rita Nazareth -

U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a sixth straight day, as the cost of insuring European government debt against default rose to a record on concern the region’s crisis is worsening.
Bank of America Corp. and Citigroup Inc. slumped at least 2.5 percent. Mosaic Co. and Halliburton Co. slid more than 0.5 percent, pacing losses in commodity producers. Deere & Co. rallied 4.4 percent as the world’s largest farm-equipment maker reported profit that topped analysts’ projections.
The S&P 500 retreated 1.2 percent to 1,173.44 at 9:45 a.m. New York time. The benchmark gauge tumbled 6.5 percent in six days, the longest losing streak since August. The Dow Jones Industrial Average retreated 128.66 points, or 1.1 percent, to 11,365.06. U.S. equity markets will be closed tomorrow for the Thanksgiving holiday and will end trading at 1 p.m. Nov. 25.


“There’s a lot of negativity,” Uri Landesman, who helps oversee more than $1 billion as managing general partner of New York-based hedge fund Platinum Partners LLP, said in a telephone interview. The rise in bond yields in Europe shows that “everybody thinks they are going bust. I’m hoping this is a sign that everybody is so negative that the odds are the next move is going to be positive. When everybody thinks the world is coming to an end, that’s the time you buy the market.”
The debt crisis that began more than two years ago now risks engulfing Germany. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose to an all- time high as Germany failed to find buyers for 35 percent of the bonds offered at an auction. European services and manufacturing output contracted and a preliminary gauge indicated China’s manufacturing shrank by the most since March 2009.
U.S. Economy
Equity futures maintained losses after reports indicated more signs of a slowing economy. Consumer spending in the U.S. rose less than forecast in October. Orders for durable goods fell in October as demand for aircraft and business equipment cooled, while more Americans than forecast filed for unemployment benefits last week.
Stocks tumbled yesterday, driving the S&P 500 to its longest slump in almost four months, as slower-than-estimated economic growth overshadowed signs the Federal Reserve may provide more stimulus.
Concern about a global financial crisis sent financial stocks lower. Bank of America lost 2.6 percent to $5.23, while Citigroup decreased 3.5 percent to $23.61. Both are among lenders that may have to temper plans to raise dividends and buy back stock next year as the Federal Reserve toughens capital tests for the biggest U.S. banks.

‘Severe’ Recession

The Fed imposed a tougher capital test on the 31 largest U.S. banks yesterday, releasing the criteria for measuring their wherewithal if the U.S. economy sours and major trading partners default on their debt. Lenders need to prove they have the capital to withstand a “severe” U.S. recession with 13 percent unemployment and an 8 percent decline in gross domestic product before they can increase dividends or repurchase shares.
Some energy and raw materials producers sank as the dollar rose, reducing the appeal of commodities as alternative investments. JPMorgan Chase & Co. downgraded commodities to “underweight,” citing policy failures in the U.S. and Europe. Mosaic retreated 0.5 percent to $51.63. Halliburton fell 2.4 percent to $32.89.
Deere rallied 4.4 percent to $75.11 as it also forecast 2012 earnings that topped projections. The company, led by Chief Executive Officer Sam Allen, has benefited as U.S. farmers used cash from rising corn and soybean prices to buy high-horsepower equipment. U.S. farm income will jump 31 percent this year to a record $103.6 billion, the U.S. Department of Agriculture said in August.
Boston Scientific Corp. rose 1.5 percent to $5.39 after gaining U.S. approval for a new version of its drug-coated heart stent. The second-biggest heart-device maker by revenue will immediately begin manufacturing and selling the Promus Element stent system, the Natick, Massachusetts-based company said in a statement late yesterday.