By Sarah Jones
June 8 (Bloomberg) -- Stocks fell in Europe and Asia amid speculation that share prices have outpaced the prospects for earnings growth after a three-month rally. U.S. futures slid.
Air France-KLM Group dropped for a fourth straight day after the industry’s main trade group said airline losses worldwide may total $9 billion in 2009, nearly double a previous forecast. Vivendi SA slipped 2.5 percent after UBS AG recommended selling the company’s shares.
Europe’s Dow Jones Stoxx 600 Index slipped 1.4 percent at 8:09 a.m. in London. The measure, which has rebounded 32 percent since March 9 on growing speculation that the worst of the first global recession since World War II is over, is valued at 24.9 times the earnings of its companies. That’s the most expensive level since 2004, weekly data compiled by Bloomberg show.
“We are expecting the market to come off a little bit after those strong rallies we saw as the end of last week.” said Joshua Raymond, a London-based market strategist at City Index.
The MSCI Asia Pacific Index fell 0.5 percent, led by commodity producers. Companies in the gauge currently trade at an average 1.5 times the book value of assets, the highest level since Sept. 29.
Futures on the Standard & Poor’s 500 Index slipped 0.7 percent, indicating the benchmark gauge for U.S. equities may retreat after three straight weeks of gains.
Airline Sales
Air France, Europe’s biggest airline, declined 2 percent to 10.63 euros. The International Air Transport Association said that sales may fall 15 percent this year to $448 billion from $528 billion in 2008.
“This is the most difficult situation that the industry has faced,” IATA Chief Executive Officer Giovanni Bisignani said. “Our future depends on a drastic reshaping by partners, governments and industry.”
Separately, Air France said it first noticed flaws with the Airbus A330 speed sensors involved in last week’s deadly crash more than a year ago.
Vivendi decreased 2.5 percent to 18.12 euros after UBS downgraded the owner of the world’s largest music company to “sell” from “neutral” on concern that competition will erode profit at the company’s SFR mobile-phone unit.
Lloyds Banking Group Plc slid 2.3 percent to 64.7 pence after the lender said it received bids for 87 percent of the stock in a share offer. It will offer the remaining shares to investors for at least 38.43 pence each.
Separately, Deutsche Bank AG raised its recommendation on Lloyds to “buy” from “sell.” Deutsche Bank, which last had a “buy” recommendation on Lloyds in July 2008 according to Bloomberg data, increased its price estimate on the shares to 100 pence from 35 pence.
Barclays, BlackRock
Barclays Plc slipped 2.9 percent to 276.75 pence. The U.K.’s third-largest bank said it’s in talks with bidders including BlackRock Inc. for its asset management division. The lender said it received “other proposals” for iShares and the broader Barclays Global Investors business.
The Daily Telegraph reported earlier that Barclays would say today that a $13 billion sale of its BGI unit to BlackRock is almost complete. The newspaper did not say where it got the information. A sale would trigger a potential $585 million windfall for BGI workers and leave Barclays with a 20 percent stake in BlackRock, the newspaper said. A completed deal may be announced June 10, the Telegraph also said.
H. Lundbeck A/S sank 15 percent to 101.75 kroner after the Danish drugmaker and Takeda Pharmaceutical Co. said they will delay submission in the U.S. of an experimental anti-depressant drug by 18 to 24 months until they have established the safest dose.
Arcandor AG dropped 33 percent to 1.26 euros after the German retailer’s spokesman Gerd Koslowski said the company may be forced to file for insolvency today and its survival depends on government aid.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
Posts
No comments:
Post a Comment