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Stocks drop in Europe, Asia as dollar advances to four-year high

Stocks fell in Europe and Asia amid pro-democracy protests in Hong Kong and the dollar strengthened to a four-year high. New Zealand's dollar weakened as the central bank announced its biggest currency sales since 2007.

HSBC Holdings Plc led the 0.3 percent drop in the Stoxx Europe 600 Index by 6:23 a.m. in New York. Hong Kong's Hang Sang Index erased its gain for the year and Standard & Poor's 500 Index futures fell 0.4 percent. The Bloomberg Dollar Spot Index added 0.2 percent and the kiwi weakened against its major peers. Nickel tumbled 2.2 percent, poised to enter a bear market.

Pro-democracy protesters in Hong Kong pledged to continue demonstrations unless the city's top official steps down, as violent clashes paralyzed the city center. U.S. consumer spending and personal income data are scheduled for later today while euro-area consumer confidence diminished in September.

"The European economy keeps weakening, and the overall business climate is weighing on the market," Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich, said by phone. "Certainly the demonstrations in Hong Kong add to uncertainty."

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, is heading for its biggest quarterly advance since the third quarter of 2008.

The dollar rose 0.2 percent today to 109.54 yen and touched 109.75, its highest level since August 2008. It added 0.4 percent to 87.27 cents against its Australian counterpart, touching the strongest level since January.

The Fed mustn't "fall behind the curve" as it weighs when to start raising interest rates, Dallas Fed President Richard Fisher said in a Fox News interview, citing strengthening U.S. growth and building wage-price pressures.

U.S. consumer spending climbed 0.4 percent last month after falling 0.1 percent in July, while gains in personal income accelerated, according to Bloomberg News surveys before today's Commerce Department data at 8:30 a.m. Washington time.

A report from the National Association of Realtors at 10 a.m. may show a pending home-sales index slipped 0.5 percent in August following a 3.3 percent gain in the previous month.

An index of executive and consumer sentiment in the euro area slipped to 99.9 in September from 100.6 a month earlier, the European Commission in Brussels said today. That's the lowest since November and in line with the median of 25 forecasts in a Bloomberg News survey.

New Zealand's dollar plunged to as low as 77.09 U.S. cents, the least since Aug. 5 last year, after the central bank said it sold a net NZ$521 million in August, the most since July 2007. Prime Minister John Key said the so-called Goldilocks level for the nation's currency is around 65 U.S. cents, Interest.co reported, citing comments to reporters.

Spanish and Italian government bonds dropped after Catalonian President Artur Mas and Spanish Prime Minister Mariano Rajoy clashed over whether the region can keep planning a Nov. 9 referendum on separation. Spain's 10-year yield rose six basis points to 2.25 percent and Italy's increased five basis points to 2.44 percent.

Futures on the S&P 500 expiring in December dropped after the index sank the most in almost two months last week.

DreamWorks Animation SKG Inc. jumped 54 percent in early New York trading after people familiar with the matter said it is weighing a sale to Softbank Corp.

HSBC and Standard Chartered Plc slid more than 1 percent each as they shuttered some Hong Kong branches. Commerzbank AG fell 3.9 percent after a person familiar with the matter said the German lender faces a U.S. inquiry into whether it broke anti-money-laundering laws. RWE AG dropped 2.3 percent after Germany's largest power producer said a plan to sell its oil and gas unit has been delayed.

Balfour Beatty Plc sank 20 percent after Britain's biggest builder signaled the outlook for construction earnings has further deteriorated and said its chairman and interim chief executive officer will leave.

UBS AG climbed 0.6 percent after Switzerland's largest bank indicated profit for July and August already exceeds analyst estimates for the full third quarter. Air France-KLM Group rose 0.4 percent after saying it will seek to resume a full flight schedule this week and continue to pursue an agreement with its pilots. That sent travel and leisure shares in the Stoxx 600 for the biggest gain as a group.

The MSCI AC Asia Pacific Index slid 0.7 percent today after a third weekly decline.

The MSCI Emerging Markets Index fell 0.7 percent to 1,017.20. The gauge has lost 3.2 percent this quarter, set for the steepest slump since the period ended June 2013.

PetroChina Co. and Bank of China Ltd. sank more than 1.4 percent as the Hang Seng China Enterprises Index fell to a two- month low. Thousands of pro-democracy protesters remained near government offices in the Admiralty district after weekend clashes with police. The Hong Kong dollar weakened the most since 2011.

China plans to start yuan-euro direct trading tomorrow to lower exchange-rate costs and boost the currencies' use in bilateral trade and investment, according to a statement posted on the People's Bank of China's website.

Indonesia's rupiah slumped to a seven-month low versus the dollar as overseas investors pulled $119 million from the nation's shares on Sept. 26.

Russia's ruble weakened 1 percent to 44.2742 versus the central bank's target basket of dollars and euros, 0.3 percent away from the level of 44.40 at which policy makers said they would begin market interventions.

Nickel dropped to $16,600 a metric ton. A close at that price would be a 21 percent drop since May 13, marking the metal's entry into a bear market.

West Texas Intermediate oil dropped 0.4 percent to $93.17 a barrel and copper slipped 0.4 percent to $6,692 a ton, heading for a monthly decline of 4.2 percent, the biggest retreat since March. U.K. gas for winter fell as much as 2.2 percent to 56 pence a therm ($9.16 a million British thermal units) after a preliminary supply accord between Russia and Ukraine on Sept. 26 curtailed the risk of reduced flows to Europe.

The extra yield investors demand to hold high-yield bonds rather than investment grade securities in euros rose to the highest in a year. The average spread widened to 2.83 percent from 2.47 percent last month, according to Bank of America Merrill Lynch Index data.

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