Bloomberg Stocks, Euro Slide on Government Debt Concern; Commodities Sink

May 4 (Bloomberg) -- U.S. equities tumbled the most since February and European stocks erased their 2010 gain, while the euro slid to a one-year low, amid concern a government debt crisis is spreading. Oil, copper and gold sank on a slowdown in Chinese manufacturing. Treasuries rallied.

The Standard & Poor’s 500 Index slid 2.4 percent at 4 p.m. in New York and the Stoxx Europe 600 Index plunged 2.9 percent, leaving it down 0.4 percent this year. The euro weakened below $1.30 for the first time since April 2009. Copper fell to the lowest since February, while oil sank the most in three months as the dollar rose against 14 of 16 major counterparts. The 10- year Treasury yield slid 8 basis points to 3.6 percent.

Spanish Prime Minister Jose Luis Rodriguez Zapatero said speculation of a bailout for Spain is “complete madness” and the nation has “strong solvency.” His remarks came as a 110 billion-euro ($143 billion) rescue package to help Greece avoid default fails to ease concern that swelling sovereign debt will derail the economic recovery.

“Spain and Portugal are both endangered species,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which manages $9 billion. “The attention could shift to one of those countries. In the U.S., it’s no longer news that earnings are better than expected. The stock market has had a great run. I’ve got a feeling that May is going to be a month of consolidation or even of backing down a little bit.” more...