(Bloomberg) -- The yen strengthened for the first time in four days against the dollar and the euro, Treasuries gained and stocks declined on speculat

(Bloomberg) -- The yen strengthened for the first time in four days against the dollar and the euro, Treasuries gained and stocks declined on speculation losses at U.S. banks will bring the rally in global equities to a halt.The Japanese currency climbed 0.8 percent versus the dollar and 2 percent against the euro. The euro dropped 1.2 percent compared with the dollar and Europe’s Dow Jones Stoxx 600 Index slid 1.3 percent after a report showed the region’s economy shrank more than estimated in the fourth quarter.Asian stocks declined, with the MSCI Asia Pacific Index falling for the first time in five days after rising 23 percent since March 9. Standard & Poor’s 500 Index futures slid. Stocks in emerging markets fell, snapping a 30 percent gain in the past five weeks and the 10-year U.S. note advanced for the first time in four days.

“It’s a bear-market rally because we have not yet turned the economy around,” billionaire investor George Soros, 78, said in a Bloomberg Television interview yesterday. “This isn’t a financial crisis like all the other financial crises that we have experienced in our lifetime.”

European Contraction

The International Monetary Fund will raise its forecast for U.S. bad debt to $3.1 trillion from a January prediction of $2.2 trillion, with estimates of another $900 billion of toxic assets from Europe and Asia, the Times said today in London without saying where it got the information.

The Dow Jones Stoxx 600 Index fell for a third day after the European Union’s statistics office in Luxembourg said gross domestic product in the euro region declined 1.6 percent from the previous three months, the most in at least 13 years. The EU’s March 5 estimate was for a 1.5 percent contraction.Futures on the S&P 500 Index fell 1.7 percent on speculation that Alcoa Inc., the largest U.S. aluminum producer, will start earnings season after the close of trading today by announcing a first-quarter loss of $400 million. Profits for companies in the S&P 500, which advanced 23 percent since reaching a 12-year low on March 9, dropped for the seventh straight quarter, according to analyst estimates compiled by Bloomberg, the longest streak since the Great Depression.

Waning Profit
Treasuries rose as the Federal Reserve prepared to buy government debt as part of a quantitative easing policy designed to revive the economy by lowering borrowing costs. The yield on the February 2019 note fell two basis points to 2.90 percent.For S&P 500 companies, profits probably fell 37 percent in the first quarter, according to estimates from more than 1,700 securities analysts compiled by Bloomberg.

Michael Mayo, the New York-based analyst who left Deutsche Bank AG to join Calyon Securities, recommended selling U.S. bank stocks yesterday and said loan losses will exceed levels from the Great Depression. The MSCI Emerging Markets Index of 23 developing countries dropped 1.2 percent today. The global benchmark climbed 32 percent in the previous 25 days, the biggest gain for the gauge since it started in 1987. Russia’s Micex Index slipped 1.3 percent even after Credit Suisse Group AG upgraded the nation’s equities to “overweight” from “underweight.”