(Bloomberg) — U.S. stocks fell, with the Dow Jones Industrial Average extending its longest slide since the financial crisis of 2008, and commodities slumped as data on jobs and factory orders added to concern the economic rebound is slowing. The 10-year Treasury yield held below 3 percent.
The Dow lost 85.93 points, or 0.9 percent, to 9,646.6 and the Standard & Poor’s 500 Index retreated 0.8 percent at 1:33 p.m. Both are trading below their lowest closing levels since at least October 2009. Crude oil fell 1.7 percent to below $72 a barrel and the S&P GSCI Index of commodities lost 1 percent. Gold climbed from a five-week low on demand for a safe haven.
Today’s reports showing a decrease in jobs and a 1.4 percent drop in factory orders extended a slide that threatens to drag the S&P 500 into a bear market and follow reports yesterday showing a slowdown in manufacturing growth and a bigger-than-estimated drop in pending home sales. The latest economic releases are causing investors to question whether analysts were too optimistic in predicting 32 percent profit growth for S&P 500 companies this year.
“The earnings numbers for 2010 are aggressive unless you believe there’s a V-shaped recovery,” said Russ Koesterich, the San Francisco-based head of investment strategy for scientific active equities at BlackRock Inc., which manages $3.36 trillion in assets. “Clearly, we’re not in a V-shaped recovery,” he said. “There’s nothing that tells me that we’re at a level where the market is so cheap that you want to buy here.”
Employment Report
The S&P 500 has tumbled 16 percent from its 2010 high in April, a slump that dragged its valuation to the lowest level in a year at less than 15 times reported operating earnings.
Most European gained even as the Stoxx Europe 600 Index ended little change. The European benchmark index is trading at 11 times reported earnings, the lowest level since 2008. BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc increased after the Australian government scaled back a proposed tax on mining companies. Dana Petroleum Plc jumped 22 percent in London after the Scottish oil explorer said it received a takeover approach.
Asian and Emerging Markets
The MSCI Asia Pacific Index lost 0.3 percent after Goldman Sachs Group Inc. cut its forecast for China’s growth this year to 10.1 percent from 11.4 percent as government restrictions on lending and real estate slow expansion in the world’s fastest growing major economy.
Stocks in eastern Europe rose for the first time in four days, sending MSCI’s regional index to a 2.6 percent gain, after Poland’s central bank boosted its economic growth forecast and metals producers rallied. Economic growth in emerging markets means stocks are in a “bull phase,” even after the global benchmark MSCI Emerging Markets Index fell 13 percent from its 2010 high, according to investor Mark Mobius.
“We are happy with the correction,” Mobius, who oversees $34 billion in emerging markets at Templeton Asset Management Ltd., said at a briefing today in Paris. “We’ll be able to buy cheaper stocks.”
Copper for September delivery gained 1.2 percent to $2.912 a pound. Crude oil for August delivery declined 1.7 percent to $71.70 a barrel. Futures touched $71.62, the lowest level since June 8. Prices have slipped 9 percent this week.
–With assistance from Stephen Kirkland in London. Editors: Michael P. Regan, Nick Baker
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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