By Alexander Ragir and William Freebairn
Oct. 31 (Bloomberg) -- Brazilian stocks fell for the first time in four days after banks and retailers missed analysts' profit estimates and the nation's biggest homebuilder said it slowed its expansion last quarter.
Lojas Renner SA, Brazil's biggest publicly traded clothing retailer, slid the most in four weeks after third-quarter profit trailed estimates. Banco Nossa Caixa SA paced declines for banks on speculation it'll face more obstacles in its proposed purchase by Banco do Brasil SA. Cyrela Brazil Realty SA Empreendimentos & Participacoes plunged 12 percent after the expected sales value of the projects it started last quarter dropped 33 percent.
``We're pricing in a slower growth environment and commodities are falling steadily,'' said Felipe Casotti, economist at Maxima Asset Management in Rio de Janeiro, which manages the equivalent of $245 million in assets. ``But it looks like volatility is falling so there may be some support as we look forward.''
The Bovespa dropped 0.5 percent to 37,256.84. Mexico's Bolsa rose 1.2 percent. The MSCI Emerging Markets Index gained 1.6 percent.
Even with today's decline, the Bovespa index has gained more than 18 percent this week, its biggest advance in almost 10 years, after the central bank halted six months of interest-rate increases. Gafisa SA led advances for Brazilian homebuilders this week, rising 27 percent after the government said it would provide low-cost loans to the industry and the Federal Reserve said it would provide Brazil with a $30 billion credit line to ease the credit crisis. The Bovespa plunged 25 percent in October, the worst month since August 1998.
Vale Drops
Lojas Renner led the declines in today's market, dropping 15 percent today to 15.70 reais. The company said third-quarter net income fell to 31.5 million reais ($15 million), less than the median estimate of 37.1 million reais from four analysts surveyed by Bloomberg News.
Banco Daycoval SA, a Brazilian bank that specializes in loans to small and mid-size companies, fell 1.9 percent to 5.05 reais. Third-quarter earnings per share was 17 percent less than the median of four estimates compiled by Bloomberg. Itau Corretora said the results were ``weak,'' citing a weakening in asset quality and losses related the drop in the real currency.
Banco Nossa Caixa SA sank 6.5 percent to 32.30 reais, the most since Oct. 15. O Estado de S. Paulo newspaper reported Banco do Brasil SA may not be able to buy the state-controlled bank without a competitive bidding process.
Aracruz Gains
Cyrela, the largest real-estate developer, plunged 12 percent to 10.60 reais. Cyrela and its partners started developments worth as much as 1.05 billion reais ($502 million) in the third quarter, compared with 1.57 billion reais in the year ago period.
Mexico's Bolsa index rose for a fourth day and had its biggest weekly gain in 20 years as companies that depend on financing climbed on bets central bank moves will ease credit.
``The catalyst for this rally has been the announcement by the Fed,'' said Jose Arturo Tobias, head of equity research at Bulltick Capital in Mexico City. The Fed cut interest rates this week and provided Mexico with a $30 billion credit line.
Mexichem SAB, the plastics maker that said last year it would spend $1 billion on acquisitions by 2012, rose the most in the Bolsa index on speculation its access to credit may increase, Tobias said. Mexichem gained 14 percent to 12.73 pesos.
An index of Mexican homebuilders rose to the highest in almost two weeks.
In other Latin America markets, Argentina's Merval rose 3.8 percent even after Standard & Poor's cut the nation's debt rating. Peru's Lima General climbed 3.7 percent and Colombia's IGBC gained 0.7 percent. Chilean markets were shut for holiday.
-- Editor: Allen Wan
To contact the reporters on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net; William Freebairn in Mexico City at wfreebairn@bloomberg.net
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