Aug. 24 (Bloomberg) — Stocks tumbled, the 10-year Treasury yield fell to the lowest in 17 months and the yen surged to the highest versus the dollar since 1995 as a bigger-than-estimated plunge in home sales stoked concern the economy may relapse into a recession. Oil fell below $72 a barrel.
The Standard & Poor’s 500 Index sank 1 percent to 1,056.89 at 11:42 a.m. in New York, paring a drop of as much as 1.9 percent. Japan’s Nikkei 225 Stock Average entered a bear market and the MSCI World Index of stocks in 24 developed nations fell 0.9 percent. The yen gained as much as 1.6 percent to 83.60 per dollar and the Swiss franc rose to a record against the euro. U.S. 10-year yields fell 12 basis points to 2.48 percent, the lowest since March 2009, and the two-year yield slipped to a record low.
Stocks extended losses after purchases of existing homes plunged 27.2 percent to a 3.83 million annual rate, figures from the National Association of Realtors showed today in Washington. The pace compares with the median forecast of a 4.65 million rate, according to a Bloomberg News survey.
“This is yet one more piece of disappointing economic news,” said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. “Irrespective of whether there’s a double dip, jobs aren’t being created. Without jobs they’re not going to get better numbers on housing.”
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