“Commodities dropped for a fourth day and stocks fell as $85 billion of spending cuts were set to be triggered in the U.S. and manufacturing slowed in China and the euro area. The 17-nation shared currency and the pound weakened while the Swedish krona strengthened.
The Standard & Poor’s GSCI gauge of 24 raw materials dropped 1.1 percent at 7:25 a.m. inNew York as lead, aluminum and copper fell at least 2 percent. Oil in New York declined 1.5 percent. The Stoxx Europe 600 Index slid 0.9 percent and S&P 500 Index futures lost 0.4 percent. The euro dropped below $1.30 for the first time in eight weeks. The pound tumbled 0.9 percent to $1.5027 and gilts rose after manufacturing unexpectedly shrank last month, whileSweden’s currency climbed at least 0.4 percent against its 16 major peers as fourth-quarter gross domestic product exceeded analyst estimates.
The U.S. Senate rejected a pair of partisan proposals to replace the automatic across-the-board spending reductions which the International Monetary Fund says will hurt global growth. Manufacturing in America probably expanded in February while consumer spending and construction increased in January, economists said before reports today. Data showed China’s manufacturing slowed for a second month while factory output in the euro area contracted for the 19th straight month.
“Risk assets underperformed as data such as PMIs reinforced a view that we are in a low growth environment,” said Michael Quach, investment strategist in London at Smith & Williamson Investment Management, which has $19 billion in assets. “Stimulus and other confidence boosting measures provided by central banks around the world have helped to reduce systemic risk, but there are still a lot of headwinds in the economy.”
