U.S. stocks fell, erasing early gains, and commodities dropped for a third day as the Federal Reserve said growth in employment remains slow and strains in financial markets continue to pose risks to the economy. Oil slid to a three-month low after American supplies increased.
German government bonds climbed, snapping a two-day drop, as France backed Germany in refusing to add to the European Union’s 440 billion-euro ($581 billion) rescue fund and rejecting joint euro-area debt securities.
Treasury 10-year notes headed for the longest streak of weekly losses in 19 months before a report economists said will show consumer spending gained last month, stoking speculation the central bank will slow asset purchases.
Derivatives traders are more concerned than at anytime since June that European leaders will fail to address the crisis engulfing the region’s single currency, driving up the cost to borrow for financial companies.