European Stocks Decline, Led by JCDecaux; Asian Shares Advance

By Adam Haigh

March 11 (Bloomberg) -- European stocks slipped after their biggest gain of 2009 as JCDecaux SA forecast its first annual sales decline and utilities slumped. U.S. index futures fluctuated, while Asian shares climbed.

JCDecaux tumbled 16 percent as the world’s second-largest seller of outdoor advertising scrapped its dividend. E.ON AG extended its two-day decline to 7.3 percent after Germany’s biggest utility predicted a profit drop.

“Company outlook statements are dire and earnings visibility is extremely low across the market,” said Chirin Gill, a London-based fund manager at Daiwa SB Investments, which has $60 billion. “Earnings revisions may need to come down.”

The Dow Jones Stoxx 600 Index fell 0.2 percent to 165.63 at 9:30 a.m. in London, extending its 2009 slump to 17 percent. The regional gauge surged 5.1 percent yesterday, the steepest jump since Dec. 8, as Citigroup Inc.’s Chief Executive Officer Vikram Pandit said the bank is having its best quarter since 2007.

The MSCI Asia Pacific Index added 2.6 percent today after HSBC Holdings Plc also said earnings are improving.

Futures on the Standard & Poor’s 500 Index added 0.1 percent after falling 0.5 percent. The benchmark index for U.S. equities surged 6.4 percent yesterday, rebounding from a 12-year low as all 10 industry groups advanced. The rally only lifted the S&P 500 to the highest level since Feb. 27.

Losses at financial companies reaching almost $1.2 trillion worldwide and disappointing results from Anglo American Plc to Bayer AG have sent the MSCI World Index of 23 developed markets 21 percent lower this year.

Earnings Results

Earnings for 269 companies in the Stoxx 600 that have reported earnings since Jan. 12 dropped 94 percent, according to Bloomberg data. That compares to a 58 percent contraction in profit for the 469 companies that have reported results in the S&P 500 during the same period.

JCDecaux slid 16 percent to 8.24 euros. The company reported a 51 percent drop in 2008 profit and said the decision to omit last year’s dividend was made “to maintain financial flexibility.”

JCDecaux forecast so-called organic revenue will decline this year for the first time in the company’s history. The company didn’t give a specific full-year forecast “given the reduced visibility.”

Utilities were the worst-performing industry group in the Stoxx 600, falling 2.1 percent.

E.ON dropped 3.1 percent to 18.75 euros. The company said yesterday it expects 2009 profit before writedowns on assets and hedging derivatives will fall 10 percent.

UBS Loss

UBS AG slipped 0.9 percent to 9.7 Swiss francs after earlier falling 3.9 percent. Switzerland’s largest bank posted a 20.9 billion-franc ($18 billion) loss for 2008 after costs to settle a U.S. tax investigation and writedowns on securities.

The bank’s 2008 loss is the biggest in Switzerland’s history. UBS amassed more than $50 billion in writedowns and losses since the beginning of the subprime crisis, forcing it to raise more than $32 billion in capital from investors including the Swiss government, and cut 11,000 jobs.

SBM Offshore NV declined 2.5 percent to 10.14 euros as the world’s largest supplier of floating oil-production platforms reported a 15 percent fall in profit last year and declined to give an earnings outlook for 2009.

Cairn Energy Plc slid 5.5 percent to 1,768 pence after saying it is placing up to 6.5 million new ordinary shares in the company, representing as much as 5 percent of its existing share capital.

Pirelli Advances

Pirelli & C. SpA surged 9.8 percent to 16 euro cents. Deutsche Bank AG raised Europe’s third-largest tiremaker to “buy” from “hold.”

Toshiba Corp. rose 9.5 percent to 242 yen in Tokyo. The chipmaker will probably have operating profit of about 100 billion yen ($1 billion) in the year to March 2010, the Nikkei newspaper said, without saying where it got the information.

The S&P 500’s rebound from the 665 level is a bullish sign to traders who base predictions on so-called Fibonacci patterns in price charts. The index has rallied 7.9 percent since sinking to 666.79 on March 6. The low was within 0.3 percent of 665, a level at which the benchmark index would give up 61.8 percent of the 25-year rally beginning in 1982.

Fibonacci analysts use a system pioneered by 13th century mathematician Leonardo Pisano. To adherents, the performance of a stock or index when it approaches a 61.8 percent “retracement” can be used to forecast whether it will keep falling or recover.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net