Most U.S. stocks fell for a second day and commodities dropped asChina raised interest rates and American service-industry growth slowed, while bonds of Europe’s most-indebted countries slid and the euro weakened after Moody’s Investors Service cut Portugal’s rating to junk.

“China is perceived as the economic engine of the world,” said Oliver Pursche, co-manager of the GMG Defensive Beta Fund and president of Suffern, New York-based Gary Goldberg Financial Services, which manages about $500 million. “Them slowing down by raising interest rates at a time when we have an overhang of high unemployment and low growth in the U.S., as well as the sovereign debt issues in Europe, causes investor to get concerned about what the impact will be on our markets.”

China’s central bank raised benchmark deposit and lending rates by 25 basis points effective tomorrow, the People’s Bank of China said on its website today. The MSCI Asia Pacific Index climbed 0.3 percent before the announcement to the highest level in almost two months as Japan’s Nikkei 225 Stock Average rallied 1.1 percent. The MSCI Emerging Markets Index lost 0.4 percent as stocks in China, Turkeyand Poland fell.

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