Greek Bailout Delay Sends Stocks & Commodities Down

“Stocks (MXWD) fell, the euro weakened for a fifth day and commodities declined as Europe’s leaders remained divided over a Greek rescue and Moody’s Investors Service said it may downgrade global banks. The cost of insuring government debt against default rose to a one-month high.

The MSCI All-Country World Index (MXWD) slipped 0.6 percent at 9:50 a.m. in London. The Stoxx Europe 600 Index fell 0.7 percent, led by banks, and Standard & Poor’s 500 Index futures lost 0.4 percent. The euro declined to less than $1.30 for the first time since Jan. 25 and Spanish 10-year bonds dropped for a third day, sending the yield 10 basis points higher. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose for a seventh day, its longest run of increases since November 2010. The S&P GSCI gauge of 24 commodities sank 0.4 percent as copper retreated to a three-week low.

Concern grew that Greece will miss a debt payment next month as a decision on 130 billion euros ($170 billion) of aid was postponed to Feb. 20. Ratings for global banks may be cut as lenders worldwide face risks of rising funding costs amid Europe’s debt woes, Moody’s said. Spain sold 4.07 billion euros ($5.29 billion) of debt maturing in 2015 and 2019, more than the 4 billion-euro maximum target. France is scheduled to auction as much as 8.5 billion euros in two- three- and five-year notes.

“In the absence of a fresh catalyst, the current rally in equities is looking rather tired,” said John Woods, the Hong Kong-based chief Asian strategist at Citigroup Inc.’s private bank. “The positivity around issues such as Greece is beginning not so much to wane as to sour.”

Ban Lifted

Nine stocks (MXWD) declined for each that rose in the Stoxx 600. Spanish banks led losses as regulators lifted a six-month ban on short-selling the nation’s lenders. Banco Santander SA lost 3.9 percent, the most in six weeks. Banco Bilbao Vizcaya Argentaria SA and Bankia SA retreated more than 5 percent.

Societe Generale SA sank 3.4 percent in Paris after France’s second-largest bank said fourth-quarter profit declined 89 percent as the investment bank posted its first loss in two years. Zurich Financial Services AG slid 1.8 percent as Switzerland’s biggest insurer said fourth-quarter profit tumbled 45 percent after losses from Thai floods and other natural disasters.”

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