S&P 500 Erases 2011 Gain on Japan Concern; Treasuries Rise - Bloomberg

U.S. stocks sank, erasing the 2011 gain for the Standard & Poor’s 500 Index, and Treasuries rallied as Japan’s nuclear crisis worsened. The yen rose to a post-World War II high versus the dollar on speculation investors will buy the currency to fund rebuilding projects.

The S&P 500 lost 2 percent to 1,256.88 at 4 p.m. in New York, leaving it down 0.1 percent on the year. Futures on the index slumped 0.9 percent at 6:02 p.m., and contracts on the Nikkei 225 Stock Average traded for 8,205, or 8.3 percent less than the closing level of 8,950 in Singapore. Ten-year Treasury yields fell 10 basis points to 3.20 percent, the lowest since December. The yen appreciated against all 16 major peers, rising to as strong as 79.24 per dollar.

Equities extended their retreat as U.S. Nuclear Regulatory Commission Chairman Gregory Jaczko told lawmakers that all the water has drained from the spent-fuel pool at a crippled atomic reactor north of Tokyo and high levels of radiation have been released. The United Nations’ nuclear agency planned to call an emergency meeting to discuss the crisis and said the three reactor cores containing fuel are damaged.

“The selling today is exacerbated by the nuclear situation, which makes it much more difficult to assess Japan,” said Christopher Sheldon, the Boston-based director of investment strategy at BNY Mellon Wealth Management, which oversees $166 billion globally. “Investors are selling on the appearance of a negative situation with the nuclear reactors and you can’t say it’s unfounded because we don’t know how bad this may get.” more ...