U.S. stocks fell, led by commodity producers and retailers, after four straight weeks of gains left the Standard & Poor’s 500 Index trading at the highest level relative to earnings since 2004. The S&P 500 was valued at 18.6 times the profits of its companies as of the start of trading, the highest ratio since December 2004. The Standard & Poor’s 500 Index will keep rallying this year as exports to expanding Asian economies help U.S. companies boost profits, Bank of America Corp. said.

The U.S. economy may be on the cusp of a recovery and the impact of the nation’s stimulus plan should increase this quarter, said Laura Tyson, an adviser to President Barack Obama. U.S. payrolls fell by 247,000 in July, after a 443,000 loss in June. The jobless rate unexpectedly dropped to 9.4 percent from 9.5 percent. “We’ve had one number that’s been slightly stronger than expected,” she said. “It’s pretty hard to read a single month as creating a trend. Most of the forecasts are still that the unemployment rate rises through till the end of the year.”

Nobel Prize? winning economist Paul Krugman said the deepest slump since the Great Depression may be ending.

The Bank of Japan kept the benchmark overnight lending rate at 0.1 percent in a unanimous decision in Tokyo today, the central bank said in a statement.

China’s industrial output growth accelerated on record loans and stimulus spending. Industrial production climbed 10.8 percent in July from a year earlier after a 10.7 percent advance in June. The gain in industrial output was less than the 11.5 percent median estimate of 23 economists. Policy makers in China are wrestling with how to avert property and stock bubbles and bad loans after first?half lending tripled to $1.1 trillion as banks backed the government’s stimulus package. The Shanghai Composite Index has rallied almost 80 percent in 2009 and real?estate prices have rebounded, fueling concern that loans meant for infrastructure projects are being used for speculation. The central bank said Aug. 5 that it will use “dynamic fine?tuning” and guide “appropriate” lending growth.

China’s exports fell for a ninth month on weak global demand, Overseas sales dropped 23 percent in July from a year earlier. That matched the median estimate in a Bloomberg News survey of 23 economists. Exports fell 21.4 percent in June.