Global Stocks, U.S. Futures Fall, Led by Banks; Treasuries Rise (Adria Cimino)

Created by : Francis Goodwin View profile

Oct. 27 (Bloomberg) -- Stocks tumbled, extending the MSCI World Index's biggest monthly drop on record, as concern grew that government efforts to stabilize financial markets won't avert a global recession. Treasuries rose as investors sought the safety of government bonds.

U.S. index futures slid, indicating the market's worst monthly slump in 70 years may deepen. Europe's Dow Jones Stoxx 600 Index declined 4.7 percent as German business confidence decreased more than forecast this month. Hong Kong's Hang Seng Index sank as much as 15 percent, the most since the 1989 Tiananmen Square crackdown, after money-market rates rose.

``We've gone from financial worries to economic worries,'' said Roland Lescure, who manages the equivalent of $128 billion as chief investment officer of Groupama Asset Management in Paris. ``We're looking for direction for the economy. The problem is stock market declines lead to more declines. It's linked to forced selling.''

The MSCI World Index lost 3.1 percent to 845.07 at 11:19 a.m. in London. Futures on the Standard & Poor's 500 Index dropped 2.6 percent. The MSCI Asia Pacific Index sank 6.3 percent, extending a three-day, 13 percent retreat.

UBS AG, Switzerland's largest bank, and Deutsche Bank AG, Germany's biggest, retreated more than 6 percent. Daimler AG slipped 13 percent after Frankfurter Allgemeine Sonntagszeitung reported the carmaker may halt production for five weeks.