Stocks Fall for First Time in 8 Days as Metals, Rubber Retreat

The MSCI World stock index fell for the first time in eight days on speculation the advance has outpaced the prospects for earnings growth. Commodities dropped.

The MSCI World Index of 23 developed markets slipped 0.9 percent at 1:30 p.m. in London. Futures on the Standard & Poor’s 500 Index declined 0.7 percent. Copper fell 1.5 percent, oil decreased 0.7 percent and rubber tumbled 9.2 percent. The yen strengthened against 11 of the 16 most-traded currencies tracked by Bloomberg.

Equities retreated after China, the world’s fastest growing major economy, said it’s probing U.S. sales of chicken and auto products for “unfair trade practices,” two days after the U.S. imposed tariffs on Chinese tires. Signs that the economies are recovering from the first global recession since World War II have prompted a six-month rally that pushed the MSCI World to its most expensive level in more than six years.

“What we are seeing today is extreme nervousness,” Puru Saxena, who oversees about $260 million as chief executive officer of Puru Saxena Ltd. in Hong Kong, said in an interview on Bloomberg Television. “Most people are convinced we are going to have another autumn crash.”

The Dow Jones Stoxx 600 Index of European shares fell 1.1 percent, led by raw-material producers. A 51 percent surge since March 9 has driven valuations on the gauge to 46.8 times profit, the highest level since 2003, weekly Bloomberg data show.

Government Bailouts

The MSCI World of 23 developed nations trades at 27.3 times the earnings of its 1,659 companies after a 61 percent advance. Stocks rallied as the Group of 20 countries committed $12 trillion to help end the global recession, according to the International Monetary Fund, while the Federal Reserve has held its target rate for overnight lending between banks at near zero to unlock credit markets after the bankruptcy of Lehman Brothers Holdings Inc.