Commodities Sink Most Since 2009 as Stocks Fall

Commodities plunged the most in two years, stocks worldwide posted the biggest three-day drop since March and the dollar rallied after American jobless claims unexpectedly rose and theEuropean Central Bank signaled it will wait until after June to raise interest rates.

The Standard & Poor’s GSCI index of 24 commodities sank 6.3 percent at 2:08 p.m. in New York and has lost 9.6 percent this week. Silver tumbled 8.4 percent, extending its decline since April 29 to 26 percent. Oil sank 8.2 percent, falling below $100 a barrel for the first time since March 17. The MSCI All-Country World Index of shares in 45 nations fell 1 percent. The dollar gained 1.9 percent against the euro, making commodities quoted in the greenback more expensive for holders of other currencies.

U.S. claims for employment benefits jumped to 474,000 last week amid auto-plant shutdowns, exceeding the median economist estimate of 410,000 in a Bloomberg survey, while worker productivity declined. The euro weakened after ECB President Jean-Claude Trichet surprised some investors who expected a quicker move to fight surging inflation.

“Both equities and commodities had a big run,” said Mike Ryan, the New York-based chief investment strategist for Wealth Management Americas at UBS Financial Services Inc., which oversees $741 billion. Following the U.S. jobs report, “anyone wanting to take some profits now has an excuse to do it.”

Rallies in 2011

The S&P measure of commodities prices had surged 20 percent in 2011 through April 29. The MSCI stock gauge closed at the highest level since June 2008 on May 2 after rallying 8.2 percent since Dec. 31 following first-quarter earnings that beat estimates from 57 percent of its companies that posted results since April 11.

In addition to the employment data, a separate report today showed the productivity of U.S. workers slowed in the first quarter and labor costs rose as a growing economy prompted companies to boost employment. The Bloomberg Consumer Comfort Index dropped to minus 46.2, the lowest level in more than a month, as rising fuel costs squeezed American household budgets.

The U.S. government may say tomorrow nonfarm payrolls increased 185,000 in April after gaining 216,000 the previous month, according to the median forecast of 84 economists surveyed by Bloomberg.

“The economic outlook is looking more challenging,” said Jason Brady, a managing director at Thornburg Investment Management in Santa Fe, New Mexico, which oversees about $84 billion in assets. “People have been crowding into stocks and commodities, but with the additional slowdown in the U.S. and the more difficult employment situation, there’s suddenly more uncertainty.”

Oil, Cocoa

Crude slumped below $100 a barrel for the first time since March 17. Cocoa for July delivery slid 4.8 percent to $3,057 a ton on ICE Futures U.S. in New York. Arabica coffee declined 3.1 percent to $2.8535 a pound. Raw sugar slumped 3.1 percent to 20.69 cents a pound. Wheat declined 2.7 percent to $7.5125 a bushel, corn retreated 3.5 percent to $7.04 a bushel and soybeans fell 3.1 percent to $13.1075 a bushel.

In the U.S. stock market, the S&P 500 fell 0.4 percent. It briefly erased losses as oil’s decline drove up shares of consumer and transportation companies.

Exxon Mobil Corp. (XOM) and ConocoPhillips (COP) dropped more than 1.9 percent as oil lost 7.4 percent, the most in two years. General Motors Co. (GM) slumped 2.3 percent after saying Chinese sales declined. FedEx Corp. (FDX), operator of the world’s biggest cargo airline, and Macy’s Inc. (M), the second-biggest U.S. department- store chain, rallied at least 2.8 percent. The NYSE Arca Airline Index rose 2.5 percent as crude extended its loss since April 29 to 12 percent, boosting optimism carriers’ costs will fall.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net.

To contact the editor responsible for this story: Nick Baker atnbaker7@bloomberg.net.