(Bloomberg News) Gasoline rose the most in three weeks and stocks fell around the world as Hurricane Sandy threatened U.S. East coast refineries and closed equity trading. Italian two-year notes dropped for a sixth day and the euro weakened.

Gasoline futures jumped 4 percent at 9:30 a.m. in New York. The MSCI All-Country World Index lost 0.2 percent and the Stoxx Europe 600 Index fell 0.5 percent as trading volume slumped. Standard & Poor's 500 Index futures were 0.4 percent lower. Italy's two-year note headed for its longest run of declines since May, with the yield increasing seven basis points to 2.35 percent. The euro depreciated 0.3 percent to $1.2897. A gauge of European corporate credit risk rose for an eighth day.

The U.S. securities industry canceled equity trading on all markets today, and some New Jersey refineries shut or reduced operations as Sandy headed toward New York City with 70-mile- per-hour winds. Federal government offices in the Washington area will be open only for emergency personnel beginning today. Italy sold 8 billion euros ($10.3 billion) of bills.

"For today the downward pressure from the slowing global economy will move to the background as Sandy and the impact it could have to the most populated portion of the U.S. evolves over the next several days," Dominick Chirichella, senior partner at the Energy Management Institute in New York, said in a report.

The trading suspension in the U.S., announced by the Securities and Exchange Commission and exchanges, followed an earlier decision by the New York Stock Exchange to close floor trading. CME Group Inc. halted stock-index futures and options at 9:15 a.m. New York time. The Securities Industry and Financial Markets Association recommended trading in dollar- denominated fixed-income securities end at noon.

Hurricane Sandy

The hurricane is forecast to make landfall late today in southern New Jersey, then turn inland, according to an advisory last night from the National Hurricane Center in Miami.

Consumer spending in the U.S. rose 0.8 percent in September, more than forecast, after a 0.5 percent gain the prior month, a Commerce Department report showed today.

The Stoxx 600 fell for the first time in four days, with the number of shares changing hands 34 percent less than the 30- day average, according to data compiled by Bloomberg. Insurers declined the most among 10 industry groups. Munich Re, the world's largest reinsurer, lost 2 percent, and Swiss Re AG, the second biggest, slipped 2.9 percent.

Insurers Fall

Travelers Cos., the sole insurer in the Dow Jones Industrial Average, lost 1 percent in German trading. Allstate Corp., a U.S. home and auto insurer, dropped 0.8 percent.

ThyssenKrupp AG retreated 3.7 percent, the most in a month. Germany's biggest steelmaker asked companies to resubmit offers for its unprofitable Americas unit after deciding the original bids were too low, people familiar with the matter said.

UBS AG rallied 6.1 percent. Switzerland's largest bank will cut as many as 10,000 jobs companywide as the trading business shrinks, a person with knowledge of the plan said. Serge Steiner, a spokesman for the bank in Zurich, declined to comment.

Italian bonds fell as the government sold bills before the outcome of a regional vote in Sicily that may signal the direction of forthcoming national elections. Former premier Silvio Berlusconi said on Oct. 27 that he may withdraw support for the government of Prime Minister Mario Monti because its policies are deepening the recession. The yield on Italy's 10- year bond increased eight basis points to 4.98 percent.

Spanish Bonds

Spanish bonds also dropped, with the yield on 10-year notes rising five basis points to 5.64 percent. Germany's 10-year yield slipped below 1.5 percent for the first time since Oct. 16. The Markit iTraxx Europe index of credit-default swaps linked to 125 investment-grade companies increased three basis points to 132, the highest in more than two weeks.

Ten-year U.S. Treasury note yields dropped two basis points to 1.72 percent.

The Japanese yen gained against 14 of 16 major counterparts, strengthening 0.3 percent against the euro. It was little changed against the dollar.

Phillips 66, NuStar Energy LP and Hess Corp. said they are shutting or reducing output at New Jersey refineries as a precaution against the hurricane. Natural gas fell 0.7 percent, the fourth consecutive decline. Copper dropped 1.3 percent and oil sank 0.5 percent to $85.84 a barrel in New York.

The MSCI Emerging Markets Index declined for a second day, sliding 0.3 percent. Russia's Micex Index lost 0.5 percent, Brazil's Bovespa index slipped 1 percent and the Shanghai Composite Index sank 0.4 percent. India's Sensex added less than 0.1 percent.