By Rita Nazareth
May 23 (Bloomberg) -- U.S. stocks fell, extending three weeks of losses on the Standard & Poor?s 500 Index, as commodities tumbled amid a stronger dollar and concern that Europe?s debt crisis is worsening.
Freeport-McMoRan Copper & Gold Inc. and Halliburton Co. dropped at least 2.5 percent as figures showed weaker manufacturing growth in China. Bank of America Corp. and Citigroup Inc. slid more than 1.3 percent, following a slump in European lenders, as Spain?s ruling party suffered its worst election defeat in 30 years and S&P warned it may downgrade Italy?s debt. Boeing Co. sank 1.9 percent as analysts predicted risk for further delay of its newest jumbo jets.
The S&P 500 retreated 1.4 percent to 1,314.92 at 9:33 a.m. in New York, signaling the benchmark gauge may add to losses following its longest weekly slump since August. The Dow Jones Industrial Average decreased 166.80 points, or 1.3 percent, to 12,345.24 today.
?There?s bad news out there,? said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. ?We?ve got doubts about European fiscal austerity and weaker economic data across the board. The thing that has driven the market higher -- earnings season -- just came to an end. People will be pulling money out of riskier assets.?
The S&P 500 climbed to an almost three-year high on the final trading day of April. It slumped 2.2 percent from then through May 20 as economic data began trailing economists? estimates and investors prepared for the Federal Reserve to complete its $600 billion bond-purchase program at the end of June. Still, the benchmark rallied 6 percent from the end of 2010 through May 20 amid government stimulus measures and higher-than-estimated earnings.
Chicago Fed Index
The Federal Reserve Bank of Chicago?s gauge of economic activity unexpectedly dropped below zero in April. The national index, which draws on 85 economic indicators, was minus 0.45 in April versus 0.32 in March. A reading below zero indicates below-trend-growth in the national economy and a sign of easing pressures on future inflation.
Global stocks slumped today as Spanish Prime Minister Jose Luis Rodriguez Zapatero?s Socialist party suffered its worst defeat in more than 30 years in local elections amid a backlash over austerity measures. Italy?s credit-rating outlook was revised to negative from stable by S&P on May 20. Data today showed China?s manufacturing may expand at a slower pace this month.
Dollar, Commodities
The euro tumbled to a record low against the Swiss franc and the U.S. dollar rallied, reducing the appeal of commodities as alternative investments.
Freeport, the largest publicly traded copper producer, declined 3.4 percent to $46.73. Halliburton, the second-biggest oilfield services provider, dropped 2.5 percent to $45.99. Caterpillar Inc., the world?s largest maker of construction equipment, lost 3.4 percent to $100.80.
Bank of America declined 1.4 percent to $11.42. Citigroup retreated 1.8 percent to $40.29.
Boeing dropped 1.9 percent to $76.08. The company?s plan to ship the first of its newest jumbo jets by mid-2011 as part of the ?Year of the 747? risks another delay that would add to the 18-month setback for the plane, two analysts said.
The 747-8 ?may miss its ?near midyear? delivery target by 6-8 weeks due to minor ?issues,?? Cai Von Rumohr, a Cowen & Co. analyst in Boston, wrote in a May 20 note to investors. JPMorgan Chase & Co.?s Joseph Nadol said the same day he also sees a possible delay for the plane.
--Editors: Joanna Ossinger, Jeff Sutherland
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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