European stocks retreated for a second day as investors waited to see whether Federal Reserve Chairman Ben S. Bernanke will signal further steps to support the economy. Asian shares and U.S. futures were little changed.
Lanxess AG (LXS) tumbled 8 percent after the company said that its chief executive officer sold shares. Frontline Ltd. declined 4.7 percent after reporting a loss in the second quarter that was wider than analysts had estimated.
The benchmark Stoxx Europe 600 Index declined 0.9 percent to 225.07 at 11:17 a.m. in London, trimming its first weekly gain this month to 0.9 percent. The Stoxx 600 has fallen 23 percent from this year’s peak on Feb. 17 as European and U.S. economic reports trailed forecasts, adding to concern that the global economic recovery is at risk.
The MSCI Asia Pacific Index gained 0.4 percent, while Standard & Poor’s 500 Index futures slid less than 0.1 percent.
“The big question at the moment is ‘Are we going into a recession or not?’” said Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion. “Investors have lost their risk appetite and won’t regain it soon this year, so we can expect more sideways trading in the next few months.”
Investors are awaiting Bernanke’s speech in Jackson Hole, Wyoming, today at 10 a.m. New York time and will look for indications that the central bank will embark on further stimulus. Bernanke used his Jackson Hole speech last year to announce the Fed would “do all that it can” to spur growth. He implemented a $600 billion debt-purchase plan in November.
“Bernanke is the major event for markets today,” Jim Reid, a global strategist at Deutsche Bank AG in London, wrote in a report today. “The chairman could list a number of options ranging from mild to aggressive.”
U.S. Economic Growth
A Commerce Department report due at 8:30 a.m. in Washington may show that the U.S. economy grew 1.1 percent in the second quarter, a slower pace than the agency’s previous estimate of 1.3 percent, according to the median of 81 forecasts in a Bloomberg News survey.
A separate report may show that the Thomson Reuters/University of Michigan final index of consumer sentiment slumped to 55.8 in August from 63.7 in July, according to estimates compiled by Bloomberg.
Growth in loans to households and companies in the 17- nation euro area slowed in July as the region’s debt crisis weakened economic expansion and damped demand for credit. Loans to the private sector grew 2.4 percent from a year earlier after advancing at an annual rate of 2.5 percent in June, the European Central Bank said today.
German Equity Futures
Traders yesterday sold German equity futures to hedge their investments before France, Italy and Spain extended curbs on short selling. Spain and Italy extended their bans through Sept. 30, regulators in both countries said in a statement. France’s Autorite des Marches Financiers said its ban may last until Nov. 11.
Lanxess slumped 8 percent to 38.85 euros for the largest decline on the Stoxx 600 after the German chemicals company said in a statement that CEO Axel Heitmann sold about 10 million euros ($14 million) of shares in the company.
Frontline dropped 4.7 percent to 33.83 kroner after the world’s biggest operator of supertankers reported a second- quarter net loss of $35.2 million. That was wider than the $30.2 million average loss of 17 analyst estimates compiled by Bloomberg. The company announced a cash dividend of 2 cents for the quarter. The company said it expects the “weak trend” will persist into the third quarter.
Greek Lenders Retreat
Alpha Bank SA and EFG Eurobank Ergasias SA (EUROB) retreated 4.5 percent to 1.91 euros and 4.9 percent to 1.75 euros, respectively, before reporting earnings next week. National Bank of Greece SA (ETE) slipped 1.7 percent to 2.96 euros. UBS AG said the Mediterranean country’s debt crisis “remains challenging.”
Credit Suisse Group AG said it expects the Greek banks’ underlying second quarter to be “significantly down” on the first quarter. The Swiss brokerage doesn’t recommend buying any Greek lenders.
Amec Plc (AMEC), the U.K.-based oil and gas engineer, declined 4.6 percent to 835.5 pence after Societe Generale SA downgraded the stock to “hold” from “buy.”
Rautaruukki Oyj (RTRKS) fell 3.9 percent to 9.57 euros as the Finnish steelmaker was cut to “hold” from “buy” at Deutsche Bank AG.
Roche, Metro Slipped
Roche Holding AG (ROG), the world’s biggest maker of cancer drugs, slid 1.4 percent to 133.20 francs. The International Society for Infectious Diseases’ ProMED-mail program reported that more than two dozen cases of H1N1 swine flu proved resistant to Roche’s Tamiflu pill in Australia in the largest outbreak of the drug-evading influenza strain. Viruses from 25 of 184 patients in the Newcastle area of eastern Australia infected with the pandemic germ had a genetic mutation that reduced the potency of Tamiflu, the report said.
Metro AG (MEO) decreased 2.3 percent to 29.25 euros after Handelsblatt reported that Media Markt founder Erich Kellerhals plans to block a proposal to continue a cash-pooling agreement with Germany’s biggest retailer. The newspaper cited people familiar with the matter.
Yule Catto & Co. Plc gained 1.4 percent to 172.3 pence, heading for its largest weekly advance in seven weeks. The British supplier of polymers said first-half profit rose to 33.9 million pounds ($55 million) from 18.4 million pounds a year earlier and predicted that earnings for the full year will “modestly” exceed previous expectations, even though macro- economic disruptions will likely affect the second half.
Gildemeister AG (GIL) rallied 4.4 percent to 10.75 euros as the German maker of cutting tools said it plans to buy back as many as 3.1 million shares, or 5.1 percent of its share capital. The company added that it is considering using the repurchased stock as an “acquisition currency.”
No comments:
Post a Comment