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March 22 (Bloomberg) — Stocks and commodities dropped while Treasuries rose for a third day after manufacturing contracted in Europe and China and FedEx Corp. predicted slower growth, undermining confidence in the global economy.

The Standard & Poor’s 500 Index slipped 0.7 percent to 1,392.84 at 10:39 a.m. in New York and the Stoxx Europe 600 Index fell for a fourth straight day, tumbling 1.2 percent. The euro depreciated 0.4 percent to $1.3162. Ten-year Treasury yields declined four basis points to 2.26 percent, and the rate on the German bund decreased seven basis points to 1.91 percent. Copper and oil plunged more than 2 percent and nickel retreated to the lowest price this year.

A gauge of European manufacturing fell to 47.7 as factory output unexpectedly shrank in Germany and France, according to London-based Markit Economics. A preliminary measure of Chinese manufacturing slipped to 48.1 in March, the lowest level in four months, based on figures from HSBC Holdings Plc and Markit Economics. FedEx, operator of the world’s largest cargo airline, predicted “below-trend” growth in coming quarters.

“I am not confident on the macro outlook,” said Filippo Garbarino, Chiasso, Switzerland-based manager of the Frontwave Capital Ltd. fund. “Every small macro disappointment is an excuse to realize capital gains and become more defensive. My net exposure to Europe at the moment is zero.”

Three-Day Drop

The S&P 500 retreated for a third day as concern about global growth overshadowed a drop in jobless claims to a four- year low and better-than-forecast growth in an index of leading economic indicators. Initial applications for unemployment benefits decreased by 5,000 to 348,000 in the week ended March 17, the fewest since February 2008, Labor Department figures showed today. The median forecast of 46 economists in a Bloomberg News survey projected 350,000.

Energy, commodity and industrial companies led losses among all 10 groups in the S&P 500 today, dropping more than 1.3 percent. FedEx tumbled 3.8 percent for its biggest drop of the year. Chevron Corp., Caterpillar Inc. and Hewlett-Packard Co. slid at least 1.9 percent for the biggest declines in the Dow Jones Industrial Average.

The Conference Board’s gauge of the outlook for the next three to six months increased 0.7 percent after a revised 0.2 percent gain in January that was less than initially reported, the New York-based group said today. The median forecast of economists surveyed by Bloomberg News called for a 0.6 percent rise.

The Stoxx 600 declined to the lowest level since March 13 as mining and construction companies led losses. Randgold Resources Ltd., which operates three mines in Mali, plunged 8 percent as an army officer said the West African country’s government has been overthrown. Baloise Holding AG sank 6.3 percent as Switzerland’s third-largest insurer said profit dropped 86 percent last year.

Yields Retreat

Yields on 10-year and 30-year Treasuries retreated for a third straight day after reaching the highest levels in more than four months on March 19. The 30-year bond rate decreased two basis points to 3.37 percent.

The euro fell for a third day versus the dollar. The yen gained against all 16 of its major peers, advancing 1.1 percent versus the euro and 1.5 percent against Australia’s currency. Japan’s exports unexpectedly exceeded imports by 32.9 billion yen ($395 million) in February, the government said. The Dollar Index rose 0.3 percent.

The S&P GSCI gauge of commodities declined 1.4 percent as silver, natural gas and oil fell more than 2 percent to lead declines in 19 of 24 raw materials.

The MSCI Emerging Markets Index fell 0.7 percent, heading for its sixth straight decline. The Micex Index slid 1.5 percent in Moscow and the FTSE/JSE Africa All Shares Index retreated 0.8 percent in Johannesburg. The BSE India Sensitive Index fell 2.3 percent. The Hang Seng China Enterprises Index lost less than 0.1 percent, its seventh straight loss and its longest losing streak since June.