By Adria Cimino
Nov. 13 (Bloomberg) -- European and U.S. stock-index futures tumbled as Germany entered a recession and companies from Intel Corp. to Siemens AG and Zurich Financial Services AG reported disappointing results. Asian shares fell.
STMicroelectronics NV, Europe's biggest chipmaker, may slide after Intel, the world's largest, reduced its fourth- quarter revenue estimate by about $1 billion. BHP Billiton Ltd., the world's largest mining company, sank 12 percent in Australia as metals prices slumped. StatoilHydro ASA may lead energy producers lower as crude oil fell to its lowest in 21 months.
Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, fell 24, or 1 percent, to 2,379 at 7:42 a.m. in London. The U.K.'s FTSE 100 Index may decrease 76, according to Cantor Index, a betting firm.
``We're going to see more companies having to cut staff because the economy is slowing,'' said Andrew Lynch, who manages about $3 billion at Schroder Investment Management Ltd. in London. The contraction in Germany's economy ``was a steeper drop than I was fearing. We'll see equities go lower. People will have to revise down further their outlook for corporate earnings.''
The German economy, Europe's largest, shrank more than economists expected in the third quarter, confirming it has entered its worst recession in at least 12 years. Gross domestic product dropped a seasonally adjusted 0.5 percent from the second quarter, when it fell a revised 0.4 percent. Economists expected a 0.2 percent decline in a Bloomberg survey.
Futures on the Standard & Poor's 500 Index lost 0.8 percent, and the MSCI Asia Pacific Index sank 5 percent today.
Earnings Scorecard
Earnings for the 1,428 companies in western Europe that reported results since Oct. 7 declined 17 percent on average, trailing expectations by 7.7 percent, Bloomberg data show. Statistics Office in Wiesbaden said.
More than $29 trillion has been erased from the value of global equity markets as credit losses and writedowns totaled $949 billion in the worst financial crisis since the Great Depression. Europe's Stoxx 600 is down 44 percent in 2008, headed for its worst year since records began in 1987.
U.S. stocks fell for a third day after the Treasury scrapped plans to buy mortgage assets, shifting to use bailout funds to shore up consumer lending, while Best Buy Co. warned of a ``seismic'' slowdown in spending. U.S.-traded securities of Fortis and Royal Bank of Scotland Group Plc fell more than 4 percent from their European close yesterday.
``News that a plan to buy troubled mortgage assets has been shelved in favor of tackling problems with non-bank and consumer finance is certainly going to heap yet more concern on the market as we move towards the weekend break,'' Matthew Buckland, a dealer at CMC Markets in London, wrote.
STMicro, Siemens
STMicroelectronics and Infineon Technologies AG, Europe's second-largest maker of semiconductors, may retreat. Intel, whose chips run more than three-quarters of the world's computers, said its profit margin also will fall short of an earlier prediction. The company cited ``significantly weaker'' demand across its entire product line.
Siemens may decline. Europe's biggest engineering company reported fourth-quarter profit that missed analyst estimates on costs for job cuts at the company's transport and health-care units. Earnings at the main industry, energy and health-care divisions, which Siemens calls sector profit, declined 25 percent to 1.49 billion euros ($1.86 billion).
Zurich Financial will probably drop. Switzerland's largest insurer said third-quarter profit sank 90 percent to $154 million, falling more than analysts estimated, after debt writedowns and losses from hurricanes in the U.S.
BHP tumbled 12 percent in Australia, while Rio Tinto Group, the world's second-biggest iron-ore supplier, lost 8.2 percent. Copper slid to the lowest in more than three years in London.
Oil Tumbles
StatoilHydro, Norway's largest oil and natural-gas producer, may decline. Crude oil fell below $55 a barrel as slowing economies of the major consuming nations cuts demand for fuels.
American depositary receipts of Fortis, the financial- services company bailed out by three governments and BNP Paribas SA, sank 8.4 percent from the stock's close in Belgium. ADRs of Royal Bank, Britain's fifth-largest, lost 4.2 percent from the close in the U.K.
Treasury and Federal Reserve officials are exploring a new ``facility'' to bolster the market for securities backed by assets, Paulson said. Officials are considering using a portion of the $700 billion financial bailout money to ``encourage private investors to come back to this troubled market,'' he said.
Buying ``illiquid'' mortgage-related assets -- the reason the Troubled Asset Relief Program was established a month ago -- is no longer being considered, he said.
ICAP, BT
ICAP Plc, the biggest interbank broker, and rival Tullett Prebon Plc had their shares lowered to ``underweight'' at Morgan Stanley, which cited a `tough revenue outlook.'' ICAP was lowered from ``equal-weight'' while Tullett Prebon was cut from ``overweight.''
``Our work with heads of trading/sales and consultants drives our revenue expectations,'' the analysts, including Chris Manners, wrote in a research note dated today. ``We expect 2009 revenue declines of 5-25 percent by product.''
BT Group Plc, the U.K.'s largest phone company, aims to cut 10,000 jobs this year to improve profitability after reporting a slide in second-quarter earnings.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
Posts
No comments:
Post a Comment