The MSCI Emerging Markets Index sank 2.2 percent, the most since May 23, to 1,102.59 at 4:30 p.m. in New York. Brazil’s Bovespa Index plunged 2.3 percent, the biggest loss in six months, while Chile’s benchmark slid to the lowest since February. Equities fell in almost all nations across central and eastern Europe, led by slumps in Poland and Russia. South Korea’s Kospi Index (KOSPI) dived 2.6 percent for the biggest two-day plunge since November 2009.
The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the U.S. economy, dropped to 52.7 last month from 53.3 in June. Readings above 50 signal expansion, and economists projected 52.3 for July. Companies in the U.S. added 114,000 workers to payrolls in July, less than the 157,000 a month earlier, according to ADP Employer Services.
“The U.S. debt ceiling resolution did not turn around sentiment and investors’ worries turned to the sluggish outlook for the global growth and the renewed worries about Europe’s debt,” analysts at BNP Paribas SA including Bartosz Pawlowski in London wrote in an e-mailed report. “The market is unlikely to take the European debt crisis off the hook just yet.”
The U.S. personal spending dropped for the first time in almost two years, a report showed yesterday, outweighing relief the nation averted a default after President Barack Obama signed a plan to raise the government’s debt ceiling.
Debt Ratings
Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings for the U.S., while warning of possible downgrades if lawmakers fail to enact debt-reduction measures and the economy weakens. China’s Dagong Global Credit Rating Co. cut the rating for the U.S. to A from A+ with a negative outlook even after the government’s approval of a higher debt ceiling, according to an e-mailed statement from Dagong today. Read More
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