"The Standard & Poor’s 500 Index’s 12 percent decline from April’s high may worsen amid concern that Europe’s debt crisis will derail global growth, said Mohamed A. El-Erian, chief executive officer of Pacific Investment Management Co.
“This is not a typical retracement,” El-Erian, 51, whose firm runs the world’s biggest bond fund, wrote in an e-mail. “We are in uncharted waters on account of several issues, including what is going on in Europe and other important structural regime changes. In economic terms, European developments are unambiguously bad for global growth.”
Global stocks plunged today after U.S. jobless claims unexpectedly increased and Europe’s debt crisis deepened. The S&P 500, which closed at 1,071.59, has slumped more than 10 percent, the level at which a decline is usually considered a correction, from a 19-month high on April 23. The Stoxx Europe 600 Index sank 2.2 percent, while the euro rallied 0.7 percent to $1.2502 after earlier flirting with a four-year low. Ten-year Treasury yields sank to the lowest of the year, down 15 basis points at 3.22 percent...
"El-Erian has forecast an extended period of below-average economic growth, increased regulation and lower consumption in what Pimco, which manages more than $1 trillion from Newport Beach, California, has called the “new normal.” The U.S. economy faces a “protracted post-crisis resetting” as high unemployment persists, he wrote in a Bloomberg News column in February..."
http://www.bloomberg.com/apps/news?p....fPJgadU&pos=2



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