European stocks declined for a third day, led by banks and insurers, as concern deepened that the region’s debt crisis is spreading. U.S. index futures and Asian shares retreated.
The Euro Stoxx 50 Index of the biggest euro-area companies slid 1.2 percent to 2,082.45 at 1:28 p.m. in London after earlier rallying 1.5 percent. The gauge tumbled 8.6 percent over the previous two days, the biggest drop since October 2008.
“There’s still significant uncertainty regarding what will happen with the European debt problem,” said Pierre Mouton, a fund manager at Notz Stucki & Cie. in Geneva, who helps oversee $7.5 billion. “The market remains afraid. The debt crisis and worries about the economy are weighing on the market.”
Futures on the Standard & Poor’s 500 Index retreated 2.5 percent today, indicating the gauge will fall for a third day when U.S. exchanges open after yesterday’s Labor Day holiday. The MSCI Asia Pacific Index slid 1.6 percent.
National benchmarks indexes fell in 11 of the 18 western European markets. Germany’s DAX Index slid 0.6 percent and France’s CAC 40 lost 1 percent. The U.K.’s FTSE 100 climbed 0.3 percent. The Swiss Market Index (SMI) surged 3.6 percent after the central bank set a ceiling on the franc’s exchange rate for the first time in more than three decades.
Service industries in the U.S. probably expanded in August at the slowest pace in more than a year, showing the recovery is losing momentum, economists said before a report at 10 a.m. New York time today. The Institute for Supply Management’s non- manufacturing index fell to 51 last month, the lowest level since January 2010, from 52.7 in July, according to the median estimate of 59 economists surveyed by Bloomberg News. A reading of 50 is the dividing line between expansion and contraction.
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