By Elizabeth Stanton
Oct. 21 (Bloomberg) -- U.S. stocks slid the most in four days as technology companies and regional banks reported earnings that missed estimates and predicted the slowing economy will keep damping profits.
Texas Instruments Inc., the second-largest U.S. semiconductor maker, declined 9 percent after forecasting a drop in sales, while Sun Microsystems Inc., the fourth-biggest maker of server computers, retreated 15 percent on revenue that fell short of analyst projections last quarter. Ohio lenders National City Corp. and Fifth Third Bancorp declined after reporting losses from bad loans.
``T.I.'s results confirm a global slowdown, which seems to have a proportionately larger effect on technology companies,'' said Steven Neimeth, manager of the $600 million SunAmerica Value Fund in Jersey City, New Jersey. ``It will likely result in U.S. equity managers focusing on U.S.-based companies, which may have limited downside vs. more global companies.''
The Standard & Poor's 500 Index lost 12.54, or 1.3 percent, to 972.86 at 9:35 a.m. in New York. The Dow Jones Industrial Average slipped 79.49, or 0.9 percent, to 9,185.94. The Nasdaq Composite Index fell 32.95, or 1.9 percent, to 1,737.08. About eight stocks dropped for each that rose on the New York Stock Exchange.
The decline stalled a rebound in the S&P 500 from an almost 5 1/2 year low on Oct. 10. The benchmark index for U.S. equities climbed 9.6 percent from then through yesterday as money-market interest rates declined and Federal Reserve Chairman Ben S. Bernanke endorsed another economic-stimulus package. At least 139 S&P 500 companies report third-quarter results this week, including Apple Inc. after the market closes today and McDonald's Corp. tomorrow.
Interest Rates
Today's earnings reports overshadowed another retreat in money market rates. The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars dropped 23 basis points to 4.06 percent, the British Bankers' Association said. The overnight dollar rate slid 23 basis points to 1.28 percent, below the Federal Reserve's target for the first time since Oct. 3.
Texas Instruments lost $1.62 to $16.36. Fourth-quarter sales will be $2.83 billion to $3.07 billion and profit will be 30 cents to 36 cents a share, the company said. Analysts in a Bloomberg survey predicted profit of 44 cents a share on sales of $3.36 billion.
Sun fell 87 cents to $4.91. The company said fiscal first- quarter sales probably amounted to $2.95 billion to $3.05 billion. That missed the average of $3.15 billion expected by analysts surveyed by Bloomberg.
To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net
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Tuesday, October 21, 2008
3M, Caterpillar, National City: U.S. Equity Preview
By Elizabeth Campbell and Whitney Kisling
(Corrects to remove reference to Coach sales.)
Oct. 21 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading tomorrow. Stock symbols are in parentheses, and share prices are as of 8:25 a.m. in New York, unless otherwise specified.
3M Co. (MMM US) rose 2 percent to $58.66. The maker of more than 55,000 products from Post-it Notes to electronic road signs said earnings rose 3.2 percent on sales of safety gear and industry abrasives. 3M also lowered its 2008 forecast to a range of $5.40 to $5.48 from a previous estimate of more than $5.48. The average analyst estimate was $5.45, according to Bloomberg data.
American Express Co. (AXP US) gained 3.9 percent to $25.30. The biggest U.S. credit-card company by purchases said profit from continuing operations was 74 cents a share, beating the 59- cent average estimate of analysts surveyed by Bloomberg.
Caterpillar Inc. (CAT US) gained 2 percent to $41.73. The world's biggest maker of bulldozers and excavators reported third-quarter sales that beat analysts' estimates by 7 percent. Third-quarter profit declined to $1.39 a share as costs increased for steel and other materials, short of analysts' average estimate of $1.41 a share, according to Bloomberg data.
Coach Inc. (COH US) gained 5.9 percent to $19.73. The largest U.S. maker of luxury leather handbags said net income for the first quarter was $145.8 million, or 44 cents a share, in line with the average estimate of analysts surveyed by Bloomberg.
DuPont Co. (DD US) slid 4.9 percent to $34.40. The third- biggest U.S. chemical maker said third-quarter net income fell 30 percent to $367 million, or 40 cents a share, missing the 52-cent average estimate of analysts surveyed by Bloomberg. Declining demand in the U.S. and Europe and sales disruptions caused by hurricanes hurt earnings, the company said.
Eli Lilly & Co. (LLY US) fell 10 cents to $34: The world's biggest maker of psychiatric drugs said it is in ``advanced discussions'' to settle an investigation over the antipsychotic Zyprexa and will take a charge of $1.42 billion in the third quarter, according to a statement distributed by PR Newswire. The shares lost 10 cents to $34.
Jefferies Group Inc. (JEF US) fell 2.3 percent to $16.50. The New York-based brokerage that specializes in mid-sized companies posted a loss of $31.3 million, or 18 cents a share, compared with the 3-cent loss analysts expected, according to a Bloomberg survey. The company's investment-banking revenue slumped, hurting earnings.
KeyCorp (KEY US) lost 6.6 percent to $9.10. Ohio's third- largest bank reported a $36 million net loss in the third quarter as it set aside more money to cover soured loans. The Cleveland- based lender's loss of 10 cents a share missed analysts' average estimate of a 16 cents a share profit, according to a Bloomberg survey of 20 analysts.
Lockheed Martin Corp. (LMT US) fell 5.3 percent to $88.25. The world's largest defense company said 2009 profit may fall short of analysts' estimates after third-quarter earnings increased 2.1 percent from the sale of a Russian rocket-launching venture. Profit of $782 million, or $1.92 a share beat the estimates of analysts surveyed by Bloomberg, while sales of $10.6 billion missed.
National City Corp. (NCC US) lost 7.5 percent to $2.70. The biggest lender in Ohio said it plans to cut 4,000 jobs after reporting a wider third-quarter loss and putting more money aside to cover unpaid loans.
Netflix Inc. (NFLX US): The largest U.S. mail-order movie service lowered fourth-quarter projections for the second time this month, saying it expects as many as 9.15 million subscribers by the end of the year.
Oracle Corp. (ORCL US): The world's second-largest software maker said it would buy back as much as $8 billion in shares, bringing its total planned buyback to as much as $9.3 billion. The shares lost 4 cents to $18.12.
Pfizer Inc. (PFE US) rose 3.2 percent to $17.89. The world's biggest drugmaker said profit tripled on higher sales of its pain pill Lyrica and a drop in costs due to 11,000 job cuts last year. Pfizer raised the lower end of its 2008 forecast to a range of $2.36 to $2.41 a share from a previous estimate of $2.35 to $2.45 a share. Analysts predicted of $2.38 a share on average, according to Bloomberg data.
Regions Financial Corp. (RF US) slid 6.5 percent to $9.95. Alabama's biggest bank reported third-quarter profit excluding some items of 15 cents a share, missing the 27-0cent average estimate of 19 analysts surveyed by Bloomberg. The company said declining property values in the southern U.S. led to more losses on loans to home builders and borrowers.
SanDisk Corp. (SNDK US) fell 3 percent to $13.99. The biggest maker of memory cards for digital cameras posted a second straight loss after an industry glut drove down prices. Excluding acquisition-related expenses, the loss was 59 cents a share, wider than the 27-cent average analyst estimate, according to a Bloomberg survey.
Schering-Plough Corp. (SGp US) rose 5.5 percent to $15.30: The Kenilworth, New Jersey-based drugmaker reported third-quarter earnings excluding some items of 39 cents a share, compared with analysts' average estimate of 32 cents. Sales totaled $4.6 billion, compared with the $4.5 billion average estimate of analysts.
Sun Microsystems Inc. (JAVA US) lost 16 percent to $4.86. The world's fourth-largest maker of server computers said fiscal first-quarter sales probably amounted to $2.95 billion to $3.05 billion. That missed the average of $3.15 billion expected by analysts surveyed by Bloomberg.
Texas Instruments Inc. (TXN US) fell 8 percent to $16.55. The second-largest U.S. semiconductor maker reported a 27 percent decline in third-quarter profit on fewer orders for mobile-phone chips. Its forecast for the current quarter missed some analysts' estimates.
Weatherford International Ltd. (WFT US): The fourth-largest U.S. oilfield-services provider by market value was upgraded to ``buy'' from ``hold'' at Citigroup Inc., which cited the company's large international projects as a driver of revenue growth next year. The shares slid 20 cents, or 1.2 percent, to $17.16.
To contact the reporters on this story: Elizabeth Campbell in New York at ecampbell11@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net
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(Corrects to remove reference to Coach sales.)
Oct. 21 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading tomorrow. Stock symbols are in parentheses, and share prices are as of 8:25 a.m. in New York, unless otherwise specified.
3M Co. (MMM US) rose 2 percent to $58.66. The maker of more than 55,000 products from Post-it Notes to electronic road signs said earnings rose 3.2 percent on sales of safety gear and industry abrasives. 3M also lowered its 2008 forecast to a range of $5.40 to $5.48 from a previous estimate of more than $5.48. The average analyst estimate was $5.45, according to Bloomberg data.
American Express Co. (AXP US) gained 3.9 percent to $25.30. The biggest U.S. credit-card company by purchases said profit from continuing operations was 74 cents a share, beating the 59- cent average estimate of analysts surveyed by Bloomberg.
Caterpillar Inc. (CAT US) gained 2 percent to $41.73. The world's biggest maker of bulldozers and excavators reported third-quarter sales that beat analysts' estimates by 7 percent. Third-quarter profit declined to $1.39 a share as costs increased for steel and other materials, short of analysts' average estimate of $1.41 a share, according to Bloomberg data.
Coach Inc. (COH US) gained 5.9 percent to $19.73. The largest U.S. maker of luxury leather handbags said net income for the first quarter was $145.8 million, or 44 cents a share, in line with the average estimate of analysts surveyed by Bloomberg.
DuPont Co. (DD US) slid 4.9 percent to $34.40. The third- biggest U.S. chemical maker said third-quarter net income fell 30 percent to $367 million, or 40 cents a share, missing the 52-cent average estimate of analysts surveyed by Bloomberg. Declining demand in the U.S. and Europe and sales disruptions caused by hurricanes hurt earnings, the company said.
Eli Lilly & Co. (LLY US) fell 10 cents to $34: The world's biggest maker of psychiatric drugs said it is in ``advanced discussions'' to settle an investigation over the antipsychotic Zyprexa and will take a charge of $1.42 billion in the third quarter, according to a statement distributed by PR Newswire. The shares lost 10 cents to $34.
Jefferies Group Inc. (JEF US) fell 2.3 percent to $16.50. The New York-based brokerage that specializes in mid-sized companies posted a loss of $31.3 million, or 18 cents a share, compared with the 3-cent loss analysts expected, according to a Bloomberg survey. The company's investment-banking revenue slumped, hurting earnings.
KeyCorp (KEY US) lost 6.6 percent to $9.10. Ohio's third- largest bank reported a $36 million net loss in the third quarter as it set aside more money to cover soured loans. The Cleveland- based lender's loss of 10 cents a share missed analysts' average estimate of a 16 cents a share profit, according to a Bloomberg survey of 20 analysts.
Lockheed Martin Corp. (LMT US) fell 5.3 percent to $88.25. The world's largest defense company said 2009 profit may fall short of analysts' estimates after third-quarter earnings increased 2.1 percent from the sale of a Russian rocket-launching venture. Profit of $782 million, or $1.92 a share beat the estimates of analysts surveyed by Bloomberg, while sales of $10.6 billion missed.
National City Corp. (NCC US) lost 7.5 percent to $2.70. The biggest lender in Ohio said it plans to cut 4,000 jobs after reporting a wider third-quarter loss and putting more money aside to cover unpaid loans.
Netflix Inc. (NFLX US): The largest U.S. mail-order movie service lowered fourth-quarter projections for the second time this month, saying it expects as many as 9.15 million subscribers by the end of the year.
Oracle Corp. (ORCL US): The world's second-largest software maker said it would buy back as much as $8 billion in shares, bringing its total planned buyback to as much as $9.3 billion. The shares lost 4 cents to $18.12.
Pfizer Inc. (PFE US) rose 3.2 percent to $17.89. The world's biggest drugmaker said profit tripled on higher sales of its pain pill Lyrica and a drop in costs due to 11,000 job cuts last year. Pfizer raised the lower end of its 2008 forecast to a range of $2.36 to $2.41 a share from a previous estimate of $2.35 to $2.45 a share. Analysts predicted of $2.38 a share on average, according to Bloomberg data.
Regions Financial Corp. (RF US) slid 6.5 percent to $9.95. Alabama's biggest bank reported third-quarter profit excluding some items of 15 cents a share, missing the 27-0cent average estimate of 19 analysts surveyed by Bloomberg. The company said declining property values in the southern U.S. led to more losses on loans to home builders and borrowers.
SanDisk Corp. (SNDK US) fell 3 percent to $13.99. The biggest maker of memory cards for digital cameras posted a second straight loss after an industry glut drove down prices. Excluding acquisition-related expenses, the loss was 59 cents a share, wider than the 27-cent average analyst estimate, according to a Bloomberg survey.
Schering-Plough Corp. (SGp US) rose 5.5 percent to $15.30: The Kenilworth, New Jersey-based drugmaker reported third-quarter earnings excluding some items of 39 cents a share, compared with analysts' average estimate of 32 cents. Sales totaled $4.6 billion, compared with the $4.5 billion average estimate of analysts.
Sun Microsystems Inc. (JAVA US) lost 16 percent to $4.86. The world's fourth-largest maker of server computers said fiscal first-quarter sales probably amounted to $2.95 billion to $3.05 billion. That missed the average of $3.15 billion expected by analysts surveyed by Bloomberg.
Texas Instruments Inc. (TXN US) fell 8 percent to $16.55. The second-largest U.S. semiconductor maker reported a 27 percent decline in third-quarter profit on fewer orders for mobile-phone chips. Its forecast for the current quarter missed some analysts' estimates.
Weatherford International Ltd. (WFT US): The fourth-largest U.S. oilfield-services provider by market value was upgraded to ``buy'' from ``hold'' at Citigroup Inc., which cited the company's large international projects as a driver of revenue growth next year. The shares slid 20 cents, or 1.2 percent, to $17.16.
To contact the reporters on this story: Elizabeth Campbell in New York at ecampbell11@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net
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Merrill May Lose 10,000 Jobs in Merger, Bove Says
By Jeff Kearns
Oct. 21 (Bloomberg) -- Merrill Lynch & Co. may eliminate 10,000 jobs after Bank of America Corp. completes its $50 billion acquisition of the firm, Ladenburg Thalmann Inc. analyst Richard Bove said.
``Bank of America's `slash and burn' style following acquisitions is likely to be pronounced at Merrill,'' Bove wrote in a note to clients. ``That company still has approximately $30 billion in securities that could be written down. It overlaps with Bank of America in multiple divisions.''
Merrill had 60,900 employees as of Sept. 26, according to Bloomberg data.
Merrill Chief Executive Officer John Thain said he expects ``thousands'' of job losses from the takeover by Bank of America, the second-biggest U.S. bank by market value after JPMorgan Chase & Co. Most of the cuts will fall in information technology, operations and ``corporate functions,'' Thain said in a Bloomberg Television interview yesterday.
Banks worldwide have pared more than 130,000 jobs since June 2007 as firms including Lehman Brothers Holdings Inc. and Bear Stearns Cos. collapsed amid more than $660 billion in losses and writedowns since the global credit crisis began more than a year ago, according to Bloomberg data.
Bove said he will drop coverage of the stock on Dec. 1 when the acquisition is complete. He had a ``sell'' rating on Merrill before removing his recommendation last month.
Merrill lost 1.6 percent to $19.01 at 9:47 a.m. New York time. Before today, the shares had lost 64 percent this year. Bank of America added 3 cents to $24.43.
To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.
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Oct. 21 (Bloomberg) -- Merrill Lynch & Co. may eliminate 10,000 jobs after Bank of America Corp. completes its $50 billion acquisition of the firm, Ladenburg Thalmann Inc. analyst Richard Bove said.
``Bank of America's `slash and burn' style following acquisitions is likely to be pronounced at Merrill,'' Bove wrote in a note to clients. ``That company still has approximately $30 billion in securities that could be written down. It overlaps with Bank of America in multiple divisions.''
Merrill had 60,900 employees as of Sept. 26, according to Bloomberg data.
Merrill Chief Executive Officer John Thain said he expects ``thousands'' of job losses from the takeover by Bank of America, the second-biggest U.S. bank by market value after JPMorgan Chase & Co. Most of the cuts will fall in information technology, operations and ``corporate functions,'' Thain said in a Bloomberg Television interview yesterday.
Banks worldwide have pared more than 130,000 jobs since June 2007 as firms including Lehman Brothers Holdings Inc. and Bear Stearns Cos. collapsed amid more than $660 billion in losses and writedowns since the global credit crisis began more than a year ago, according to Bloomberg data.
Bove said he will drop coverage of the stock on Dec. 1 when the acquisition is complete. He had a ``sell'' rating on Merrill before removing his recommendation last month.
Merrill lost 1.6 percent to $19.01 at 9:47 a.m. New York time. Before today, the shares had lost 64 percent this year. Bank of America added 3 cents to $24.43.
To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.
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Toronto-Dominion, Sun Life, EnCana May Fall on Rate Cut, Oil
By John Kipphoff
Oct. 21 (Bloomberg) -- Toronto-Dominion Bank may fall, bids on the Toronto Stock Exchange indicated, after the central bank cut borrowing costs less than expected, saying it will probably have to act again to fight a credit crisis and recession.
The Bank of Canada lowered its interest rate for overnight loans between commercial banks by a quarter of a point to 2.25 percent, the lowest since October 2004. Thirteen out of 24 economists surveyed by Bloomberg predicted a cut twice as deep.
EnCana Corp. may decline, bids showed, as crude oil-prices retreated for the first time in three days after the U.S. dollar rose against the euro and the Canadian currency, dimming the appeal of commodities.
The Standard & Poor's/TSX Composite Index rose 7.2 percent to 10,251.40 yesterday in Toronto as higher oil prices and lower borrowing costs lifted energy producers and financial companies, which account for more than half the benchmark's value.
Toronto-Dominion, Canada's second-biggest lender by assets, may drop 68 cents to C$57.80, bids already submitted in Toronto showed. Royal Bank of Canada, the largest, may fall C$1.33 to C$48.50, bids indicated.
Sun Life Financial Inc. may retreat C$1.95 to C$31.77. Canada's third-largest insurer posted its first loss since going public eight years ago on writedowns tied to failed U.S. banks including Lehman Brothers Holdings Inc. and Washington Mutual Inc.
Crude oil fell as much as $2.08, or 2.8 percent, to $72.17 a barrel in electronic trading in New York.
EnCana, the nation's biggest energy company by market value, may decline C$2.06 to C$55.01, based on bids.
U.S. stock futures slid, pointing to the market's biggest drop in four days, as technology companies and regional banks reported earnings that missed estimates and predicted the slowing economy will keep damping profits.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
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Oct. 21 (Bloomberg) -- Toronto-Dominion Bank may fall, bids on the Toronto Stock Exchange indicated, after the central bank cut borrowing costs less than expected, saying it will probably have to act again to fight a credit crisis and recession.
The Bank of Canada lowered its interest rate for overnight loans between commercial banks by a quarter of a point to 2.25 percent, the lowest since October 2004. Thirteen out of 24 economists surveyed by Bloomberg predicted a cut twice as deep.
EnCana Corp. may decline, bids showed, as crude oil-prices retreated for the first time in three days after the U.S. dollar rose against the euro and the Canadian currency, dimming the appeal of commodities.
The Standard & Poor's/TSX Composite Index rose 7.2 percent to 10,251.40 yesterday in Toronto as higher oil prices and lower borrowing costs lifted energy producers and financial companies, which account for more than half the benchmark's value.
Toronto-Dominion, Canada's second-biggest lender by assets, may drop 68 cents to C$57.80, bids already submitted in Toronto showed. Royal Bank of Canada, the largest, may fall C$1.33 to C$48.50, bids indicated.
Sun Life Financial Inc. may retreat C$1.95 to C$31.77. Canada's third-largest insurer posted its first loss since going public eight years ago on writedowns tied to failed U.S. banks including Lehman Brothers Holdings Inc. and Washington Mutual Inc.
Crude oil fell as much as $2.08, or 2.8 percent, to $72.17 a barrel in electronic trading in New York.
EnCana, the nation's biggest energy company by market value, may decline C$2.06 to C$55.01, based on bids.
U.S. stock futures slid, pointing to the market's biggest drop in four days, as technology companies and regional banks reported earnings that missed estimates and predicted the slowing economy will keep damping profits.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
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Brazil Stocks Fall, Led by Steelmakers, Retailers; Bolsa Drops
By Alexander Ragir
Oct. 21 (Bloomberg) -- Brazilian stocks fell the most in three days, led by steelmakers and retailers, as UBS AG cut its earnings estimates for the country's biggest merchants and metal prices tumbled on the economic slowdown.
B2W Cia. Global do Varejo paced a decline in retailers after UBS reduced its average earnings estimate for the industry by a third. Aracruz Celulose SA, the pulp producer that reported a 1.64 billion reais loss from bad currency bets, dropped after Deutsche Bank AG and Morgan Stanley downgraded the stock. Cia. Siderurgica Nacional SA declined as a gauge of metal prices slumped to the lowest since November 2005.
The Bovespa index fell 2.1 percent to 38,602.83 at 9:48 a.m. New York time. The BM&FBovespa MidLarge Cap index slid 2.1 percent to 578.01, while the BM&FBovespa Small Cap index slipped 1.8 percent. Mexico's Bolsa Index fell 0.1 percent and Chile's Ipsa declined 0.5 percent.
UBS analyst Jander Medeiros reduced his share-price and earnings estimates for the country's retailers, citing a ``deteriorating'' consumer environment.
Lojas Americanas SA, Brazil's largest discount retailer, had its profit estimate cut 33 percent in 2009 and 38 percent in 2010, while its share-price forecast was lowered by 39 percent. The stock fell 3.4 percent to 5.65 reais.
B2W sank 3.2 percent to 26.81 reais.
Commodity Prices Fall
CSN, Brazil's third-biggest steelmaker, fell 3.2 percent to 30.99 reais.
The Bloomberg Base Metals 3-Month Price Commodity Index dropped for a second day, falling 3.6 percent to 146, the lowest since Nov. 30, 2005. Separately, Baoshan Iron & Steel Co., China's biggest steelmaker, cut prices for the third straight month, reducing them by as much as 20 percent, as an economic slowdown forces carmakers and builders to slash orders.
Aracruz dropped 3.8 percent to 3.32 reais. The world's biggest eucalyptus-pulp maker was cut to ``hold'' from ``buy'' at Deutsche Bank.
``We were overly optimistic about the supply/demand scenario,'' analyst Josh Milberg wrote in a note in which he cut share-price estimates for three Brazilian pulp producers.
To contact the reporter on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net.
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Oct. 21 (Bloomberg) -- Brazilian stocks fell the most in three days, led by steelmakers and retailers, as UBS AG cut its earnings estimates for the country's biggest merchants and metal prices tumbled on the economic slowdown.
B2W Cia. Global do Varejo paced a decline in retailers after UBS reduced its average earnings estimate for the industry by a third. Aracruz Celulose SA, the pulp producer that reported a 1.64 billion reais loss from bad currency bets, dropped after Deutsche Bank AG and Morgan Stanley downgraded the stock. Cia. Siderurgica Nacional SA declined as a gauge of metal prices slumped to the lowest since November 2005.
The Bovespa index fell 2.1 percent to 38,602.83 at 9:48 a.m. New York time. The BM&FBovespa MidLarge Cap index slid 2.1 percent to 578.01, while the BM&FBovespa Small Cap index slipped 1.8 percent. Mexico's Bolsa Index fell 0.1 percent and Chile's Ipsa declined 0.5 percent.
UBS analyst Jander Medeiros reduced his share-price and earnings estimates for the country's retailers, citing a ``deteriorating'' consumer environment.
Lojas Americanas SA, Brazil's largest discount retailer, had its profit estimate cut 33 percent in 2009 and 38 percent in 2010, while its share-price forecast was lowered by 39 percent. The stock fell 3.4 percent to 5.65 reais.
B2W sank 3.2 percent to 26.81 reais.
Commodity Prices Fall
CSN, Brazil's third-biggest steelmaker, fell 3.2 percent to 30.99 reais.
The Bloomberg Base Metals 3-Month Price Commodity Index dropped for a second day, falling 3.6 percent to 146, the lowest since Nov. 30, 2005. Separately, Baoshan Iron & Steel Co., China's biggest steelmaker, cut prices for the third straight month, reducing them by as much as 20 percent, as an economic slowdown forces carmakers and builders to slash orders.
Aracruz dropped 3.8 percent to 3.32 reais. The world's biggest eucalyptus-pulp maker was cut to ``hold'' from ``buy'' at Deutsche Bank.
``We were overly optimistic about the supply/demand scenario,'' analyst Josh Milberg wrote in a note in which he cut share-price estimates for three Brazilian pulp producers.
To contact the reporter on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net.
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European Market Update : European stocks firmer on French Gov't investment in banks; USD maintains firmer tone
| Daily Forex Fundamentals | Written by Trade The News | Oct 21 08 10:12 GMT | | |
ECONOMIC DATA(CH) China Sept Wholesale Prices Y/Y: 7.0% v 8.2% prior (SZ) Swiss Sept Trade Balance. CHF 1.44B v CHF1.20Be; Exports M/M: -8.2% v 5.1% prior; Imports M/M: -3.2% v 2.5% prior (SP) Spain Q3 Business Confidence -22.4 v -14 prior (UK) UK CBI October Quarterly Industrial Trends. -39 v -26 prior SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUMIn equities: Roche [ROG.SZ] Reported 9-month Revenues of CHF33.2B just below analyst estimates of CHF33.43B. Roche reaffirmed FY outlook and commitment to DNA offer. CEO noted that the company was not materially affected by financial market crisis || Aeroports de Paris [ADP.FR] French Fin Min Legarde: France will sell 8% stake in the airport. Separately the company announced an agreement with Schipol (Amsterdam's int'l airport) to pay €530M for 8% stake for an accord for 12 year period || Renewable Energy [REC.NO] Reported Q3 Revenues of NOK1.92B versus NOK2.08B estimates. The company lowered their Fiscal year revenue and solar output targets. It now sees FY revenue of NOK2.6B versus a prior view of NOK2.7-NOK 2.85B. It cut its FY solar target to 135MW v 145MW prior and lowered FY Solar Module Target 85MW v 90MW prior view || Norsk Hydro [NHY.NO] Reported Q3 Net Profit NOK202M below analyst estimates of NOK967M. It revenues cam in at NOK21.77B just below estimates of NOK23.33B. Primary aluminum production 439 KMT. The company CEO stated that the global financial market crisis impacted its Q3 results. || Xstrata [XTA.UK] Reported a Q3 production update t in which coal volume rose by19% y/y and Refined copper production increased by 17% y/y. lastly total mined nickel production was up17% y/y. The company noted that it financial position remains robust || Subsea 7 [SUB.NO] Reported Q3 Net $65.7M v $86.3Me; Pretax $99M v 122Me; Rev $629M v $690Me. Its backlog $4.1B v $3.7B q/q. the company saw strong demand through 2012 as underlying fundamental remain strong for the industry. || Prudential plc: [PRU.UK] Reported 9-month Revenues of £2.3B, which was up+15% y/y. the company saw market conditions as extremely challenging for some time and added that its planned goal of doubling FY05 profit in FY08 as difficult. || Debenhams [DEB.UK] Reported FY Pretax £110.1M versus £110.1M estimates and its , like-for-like sales 4.2% y/y. Its gross margins were up 0.5% y/y and that it saw gains in all major clothing categories. || Valeo [FR.FR] Reported Q3 Net Profit €6M v -€6M estimates and revenues of €2.11B compared to estimates of €2.17B. Its gross moargins were 15.2% versus 15.4% y/y. The company anticipated a further deterioration of automotive production in the Q4. Group confirmed, for 2008, an operating margin similar to that of 2007. || AstraZeneca [AZN.UK] Reported its s European SEROQUEL XR submission to be used for the for treatment of anxiety. The company noted that it saw greater improvements than placebo in short term and that Quetiapine showed fast onset of action and generally well tolerated || Verbund [VER.AS] Reports Q3 Sales of€988M versus €762M y/y and a net profit of €174M compared to €128M year-ago. Its 9 month revenue of €2.64B v €2.56Be y/y; Net Profit €602.5M v €457.9M y/y ; EBIT €885.3M v €685.1M y/y. the company stated that it would increase its dividend for 2008 || Hanover Re [HNR1.GE] Lowered its 2008 targets citing that catastrophe losses have been higher than expected. It noted that capital depletion will create further hardening of markets. Sees total writedowns ina arnge of - €360M of €466M total write-downs and unrealized losses was taken on equities. Hurricanes Gustav, Ike would cost co. approximately €250M. Co. has reduced equity exposure significantly in October but saw a positive outlook for reinsurance segment next year || Munich Re [MUV2.GE] Spokesperson reiterates the view that more writedowns were likely in Q3 but declined to comment on the company's profit outlook Speakers: ECB's Stark stated that he saw some signs of improvement in interbank market. TheECB would continue to provide liquidity as necessary since the money market continues not functioning adequately. On the inflation front, he reiterated the view the the ECB's status as a stability anchor was not in danger and that the ongoing liquidity operations were inflationary. Lastly that monetary policy must be stable and medium term focused ||ECB's Gonzalez Paramo sees significant slowdown in upcoming quarters; finds it unreasonable to think 2009 would be traumatic. Notd that the current level of Euribor was an 'anomaly'. He noted that Govts cannot support financial system for an extended amount of time. The ECB would take any action on interest rates necessary for medium term price stability. Hopes inflation will fall faster than expected. Lastly, the Lehman Brothers bankruptcy will mark a historic turning point and the demise of investment banks || Russia First Dep PM stated that Russia had no plans to devalue its currency || BoJ Dep Gov Nominee Yamaguchi noted that tensions in global markets remain extremely high and that perhaps past BoJ's easy policy might have affected markets . He noted that downside risks to Japan's economy ars rising. Central Bank to conduct monetary policy on domestic economic and outlook || Hungary Central Banker Simor: No need to intervene in Forint. He added that the Gov't CPI level was realistic and that Hungary could finance its deficit and debt obligation || Moody's affirmed South Korea A2 credit rating. The rating agency stated that the South Korean government's package of measures to help alleviate pressures affecting South Korean banks will likely be helpful to address uncertainties in the international financial system, especially as they are experienced locally. || India Fin Minister noted that the Rupee exchange rate determined by market forces of supply and demand. INR Exchange rates are monitored but India does not have a fixed-rate, preannounce target. It cited the recent Rupee weakness due to capital outflows || South Korea Gov announced steps to increase domestic construction companies in which it would acquire KRW2 Trillion of unsold apartments and KRW5 Trillion in new homes and land. State run credit guarantee agencies to back construction companies bond issues. To add liquidity to the system to lower 3-month yields || ECB's Provopoulos reiterated that the global economy continues to deteriorate while inflation remains high. -He Reiterated that ECB policy must ensure that secondary effects of inflation are contained. He expressed some optimism that inflationary expectations were moderating and that the current ECB interest rate was in line with central bank's goal of achieving price stability. Lastly he added that the recent global economic slowdown helps to restrain inflationary risks || French Pres Sarkozy noted that recent EU responses have calmed the markets. He added that no banks that received capital injections should be allowed to utilize tax havens. Europe is already in the middle of an economic crisis and thatthet EU should establish 'Sovereign Fund' to coordinate response to crisis. Lastly, He intended to persuade China to join World Finance Summit || Chinese Finance Ministry announced measure to help its export sector with planned export tax rebates increases, effective Nov 1st In Currencies: The cross currents and overall irrational price movements seem to be the norm in currencies at this time. Dealers noting that the US-German sprad relationship on the government 2-year note is perhaps the best indicator. The EUR/USD tested the 1.3210 area for fresh October lows. One dealer noted that USD continued to respond positively to the Bernanke comment of a possibility for another US fiscal stimulus package. Thus markets seem to reward the currencies of countries who take aggressive actions inresolving their economic growth issues. JPY broadly firmer in a risk aversion manner, yet the higher recent equity price action in both US and Europe. In Fixed Income The UK DMO sold £4.75B 4.25% 2011 Gilts with an average yield of 3.85% and a bid-to-cover of 2.2 times versus prior 2.1 times. This was part of the UK £37B bank recapitalization plan In Energy: Gazprom [GAZP.RU] Reportedly Russia, Iran, Qatar enter pact to create Gas Troika. || Qatar Energy Min stated thet he personally believed that the consumer price for oil is in the range of $80-$90/barrel, and that above $100 was not ideal. || Iran Oil Min: Suggest that the output cuts could be as much as 2.5M BPD at the OPEC meeting (he also noted previously the=at perhaps global demand has fallen by 2m BPD) || China's Sinopec has cut its internal prices for diesel by CNY150/metric ton to CNY6,650/ton as of Monday NOTESThe European equity markets were firmer led by the French financial sector following yesterday's post close come in which the the French banks would sell €10.5B in various subordinated debt with the Government's backing. This complemented the confidence boost provided by the Fed Chair in which consideration of a new fiscal stimulus package was appropriate. However, there are some lingering concerns in the European financial sector after several German insurers issued concerns on their outlook. Hannover Re's [HRN1.GE] Guided its Q3 lower citing credit crisis and turmoil in capital markets and thus stated that it would not be able to achieve FY targets. The USD continued its firm tone as dealers noted that perhaps it was the narrowing of the US-German 2-year spread being the current catalyst and not the narrowing of the 3-month USD Libor fixings. 3M USD Libor expected to ease below the 3.9% area following's yesterday's fixing of 4.06%. Overall traders and dealers continue to note that the abnormally high amount of cross currents in the price action these days in equities, commodities, Fixed-income and currencies as the predominant mentality remains deleveraging and liquidations. There still is th Lehman Brothers CDS settlement later today and its possible implications. Looking ahead: US Corporate earnings continue to move into focus. CAT, Dupont, Pfizer, Schering, MMM among the notables. Lastly, the Bank of Canada is expect to cut its interest rates by 50bps to 2.00% ahead of the US equity open 9:00 (BE) Belgian Oct Consumer Confidence. There are no consensus expectations for this number; The prior number was -9.0% Trade The News Staff Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing. | |
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Forex Technical Analytics
| Daily Forex Technicals | Written by FOREX Ltd | Oct 21 08 08:47 GMT | | |
CHFThe pre-planned breakout variant for buyers was realized with attainment of basic assumed targets. OsMA trend indicator, having marked attainment of channel signal '2' by buying activity essential rise gives reasons for planning priority in buying direction but after rate correction period with key supports at 1.1460/80, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For buying positions on condition of formation of topping signals the targets will be 1.1520/40 and/or further breakout variant up to 1.1580/1.1600, 1.1620/40. An alternative for sells will be below 1.1380 with targets 1.1320/40, 1.1260/80, 1.1200/20.
GBPThe assumed key supports test was confirmed but displayed by OsMA indicator essential bearish activity rise at the break of Ichimoku cloud bottom was not favorable for immediate realization of the pre-planned buying positions. Hence considering the chosen strategy based in the current situation on bearish planning priority we assume the possibility of further Ichimoku cloud bottom test at 1.7200/20, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For sells on condition of formation of topping signals the targets will be 1.7120/40, 1.7060/80 and/or further breakout variant up to 1.7000/20, 1.6920/40, 1.6860/80, 1.6800/20. An alternative for buyers will be above 1.7340 with targets 1.7380/1.7400, 1.7460/80, 1.7540/60, 1.7600/20.
JPYThe presumed test of channel signal '2' was not confirmed but further situation development together with the pre-planned and not realized sells did not display confidence of bearish development reaction to the signs of pair overbought while testing mentioned signals. Hence considering the general situation of low activity preservation of both parties the earlier drawn up trading plans remain practically unchanged. We assume the possibility of channel '2' attainment at 102.40/50, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For short-term sells on condition of formation of topping signals the targets will be 102.00/10, 101.40/60, 100.80/101.00 and/or further breakout variant below 100.40 with targets 99.80/100.00, 99.20/40. An alternative for buyers will be above 103.20 with targets 103.60/80, 104.40/60, 105.20/40.
EURThe pre-planned positions for sell were realized with attainment of basic assumed targets. OsMA trend indicator, having marked the essential bearish activity rise gives reasons for the corresponding to sells planning priorities choice for today as well. Hence and considering the ascending direction of indicator chart we assume the possibility of pair return to 1.3380/1.3400 resistance range, where it is recommended to evaluate the activity development of both parties according to the charts of shorter time interval. For sells on condition of formation of topping signals the targets will be 1.3320/40, 1.3260/80 and/or further breakout variant below 1.3240 with targets 1.3180/1.3200, 1.3120/40, 1.3060/80. An alternative for buyers will be above 1.3520 with targets 1.3560/80, 1.3620/40, 1.3680/1.3700, 1.3760/80.
FOREX Ltd | |
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Forex Technical Analysis
| Daily Forex Technicals | Written by DeltaStock Inc. | Oct 21 08 08:44 GMT | | |||||||||||||||||||||||||||||||||||||||||||||||||
EUR/USDCurrent level-1.3269 EUR/USD is in а downtrend, after finalizing the rebound from 1.3882 (Sept. 11 2008) at 1.3882. Technical indicators are falling, and trading is situated below the 50- and 200-Day SMA, currently projected at 1.4595 and 1.5183. Obviously with yesterday's high at 1.3531 was completed the whole consolidation structure since 1.3261, so now the downtrend is renewed towards 1.2993. Intraday resistance comes at 1.3284 and we expect current minor corrective phase to be limited below that level, before breaking below 1.3236, en route to 1.3129. Crucial for the downtrend from 1.3531 is 1.3331.
USD/JPYCurrent level - 101.16 The pair is in the second part of the broad consolidation since 95.75 short-term bottom, aiming at 97.63. Trading is situated below the 50- and 200-day SMA, currently projected at 107.61 and 105.76. Last week's low at 97.83 was confirmed to be the final of the slide from 107.01, so we will expect further upward activity, towards 103.55 resistance zone. There is still not a clear signal, that the corrective phase above 97.83 is already over, so one more spike high to 103.55 resistance zone can not yet be ruled out. 102.15 is crucial for the current downtrend from 102.42.
GBP/USDCurrent level- 1.7125 The pair has finished the broad consolidation above 1.9338 and the general downtrend has been renewed, targeting levels below 1.70+. Trading is situated below the 50- and 200-day SMA, currently projected at 1.8391 and 1.9421. With yesterday's high at 1.7517 the consolidation from 1.7131 was finalized and the pair has renewed its downtrend towards 1.6799 and 1.6563. Intraday expect 1.7146 to limit the upside for the next sell-off towards 1.6924.
DeltaStock Inc. - Online Forex & Securities Broker RISK DISCLAIMER: These analyses are for information purposes only. They DO NOT post a BUY or SELL recommendation for any of the financial instruments herein analyzed. The information is obtained from generally accessible data sources. The forecasts made are based on technical analysis. However, Delta Stock’s Analyst Dept. also takes into consideration a number of fundamental and macroeconomic factors, which we believe impact the price moves of the observed instruments. Delta Stock Inc. assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon the information on this page. Delta Stock Inc. shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation, losses or unrealized gains that may result. Any information is subject to change without notice. | |||||||||||||||||||||||||||||||||||||||||||||||||
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Daily Forex Analysis
| Daily Forex Technicals | Written by FOREXYARD | Oct 21 08 08:17 GMT | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HeadlinesAre we seeing the Beginning of the End of the Credit Crisis? In a speech delivered by U.S. Fed Chairman Ben Bernanke yesterday, the proposal for further government spending was again confirmed which has many analysts claiming the worst of the financial crisis may have passed. What investors are seeing now is the rebuilding and restructuring process of the global economy. This may pose challenges of various forms, but it is better than the alternative of economic collapse. Market Trend
Economic NewsUSD - USD Makes Strong Headway against Currency Counterparts U.S. Federal Reserve Chairman Ben Bernanke backed more government spending yesterday, prompting renewed hope that the worst of the financial crisis may be over. As of yesterday, the greenback underwent a strong trading session against most of its currency counterparts, making a jump through the price level of 1.3350 and closing around 1.3300 versus the EUR. Directly following Bernanke's speech yesterday afternoon, the value of the USD made a significant upturn followed by a period of uncertain floating as traders speculated about the new price level. Bernanke stated yesterday that any congressional stimulus package should be significant, but he declined to provide a number for lawmakers considering such a package. He recommended that Congress consider measures to help improve access to credit by consumers, homebuyers, businesses and other borrowers, which might be particularly effective at promoting economic growth and job creation. This is because the tightened conditions which led to the slowdown thus far could contribute to delaying economic recovery. As for today, with a speech set to be delivered by Federal Open Market Committee (FOMC) member Gary Stern at 23:45 GMT, traders could pick up a signal about the next move to be made by Fed regarding the recent financial crisis. If this speech comes off as hawkish it could boost the value of the USD and help decide its next direction. However, if his speech appears weak, we could potentially see a reversal to the USD's recent gains. EUR - While Losing Value, the EUR was able to Hold Back Dangerous Volatility The EUR saw very little change in its overall value against the other currencies yesterday. While continuing with its recent downward trend, it has managed to remain rather calm in light of recent news from the Euro-Zone market. The EUR fell against the USD for a fourth day as Federal Reserve Board Chairman Ben Bernanke endorsed additional fiscal stimulus. The pair closed at 1.3300. The only economic event out of the Euro-Zone yesterday was the German Producer Price Index (PPI), which ended up higher than the forecasted, helping to keep volatility to a minimum. Sentiment in the U.S. economy has brightened in the past week following better-than-expected news. However, the EUR is still showing signs of resilience as it traded in a relatively close range yesterday even though there was volatility throughout non-Euro crosses. It will be crucial for traders to identify how the preceding economic indicators from the U.S., European and Japanese economies will affect their positions. Today, the EUR will be absent from the economic calendar, and traders should follow overseas events in order to determine the EUR's direction for today. Special attention should be given to the speech by FOMC member Gary Stern that will be delivered at 23:45 GMT, as this will be today's leading publication. JPY - Rising US Dollar Outpaces JPY for First Time in Weeks Despite depreciating in value against the USD, the JPY saw bullish trends against most of its other major currency counterparts. The USD was unusually strong yesterday as a result of Fed Chairman Ben Bernanke's speech yesterday. The JPY showed its strength against the rest of its crosses later in the trading session, however, especially against the other major currencies as it saw a 150 point rise against the GBP, and a 120 point rise against the EUR. There will only be one data release from Japan today as All Industries Activity will be announced during the later trading sessions. The official forecast for this measure is lower than the previous reading and a rising trend will have a positive effect on the nation's currency. Traders should pay close attention to the response of equity markets to the rising dollar to determine how to continue with JPY positions. Oil - Crude Oil Prices on the Rise in Light of Production Cuts Crude Oil prices rose for a third day as signs that the Organization of Petroleum Exporting Countries (OPEC) will begin to cut output from 1 to 2 million barrels a day in stages, starting this week, in order to stabilize prices. Reducing Crude Oil output will be heavily debated as a possible way to increase Crude Oil's price in the last few months of 2008. In addition, forecasts of colder weather in the U.S. Northeast also supported this expectation as it will lead to a rise in demand for heating oil. Signs that the global credit crunch might be easing, as well as comments by U.S. Federal Reserve Board Chairman Ben Bernanke urging more government spending, prompted renewed hopes that the worst of the financial crisis may be over, lending support to Oil prices. Traders may look for another rise in value, potentially reaching into the $75-$80 range before day's end if this trend continues. Technical NewsEUR/USD It appears that the pair has fully resumed its downtrend and is currently testing the 1.3240 level. If the breach will indeed take place, another bearish movement is likely to take place, with a target price of 1.3170. GBP/USD The pair is in the midst of a very strong bearish move, as it dropped about 400 pips in one day. And now, as the Slow Stochastic on both the hourlies and the daily chart are pointing down, it seems that the bearish move might extend. Going short appears to be the preferable choice today. USD/JPY The pair is still range-trading without making a significant breach, and is currently traded around the 101.20 level. However, a bullish cross on the 1-hour chart's Slow Stochastic suggests that a bullish momentum is building up. Going long with tight stops seems to be the right strategy today. USD/CHF The pair has breached through the fibonacci key level of 1.1500, and is currently traded around the 1.1520 level. Currently, a flag formation on the daily chart implies that the bullish momentum has more steam in it. Going long might be the right choice today. The Wild CardOil For the past few days Crude Oil prices rose to almost $76 a barrel at what seems to be a mild bullish correction. However now, the Bollinger Bands on the 4-hour chart are tightening, indicating that a strong move is impending, and a bearish cross on the 4-hour chart's Slow Stochastic is taking place, suggesting that Crude Oil is resuming its downtrend. This might be a good opportunity for forex traders to enter the trend at a very early stage. Indicators
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Daily Report: Dollar Firm, Yen Catching Up
| Market Overview | Written by ActionForex.com | Oct 21 08 08:02 GMT | | |
| Dollar continues to ride on hope of a second stimulus package from the US government. Dollar index remains firm above 83 level and is set to extend recent rally. USD/CHF took the lead yesterday by breaking 1.1486 high and extends strength to 1.1544 today so far. EUR/USD edged down to new 19 months low. More importantly, note that the Japanese yen is catching up with the strength in dollar and rises against all major currencies. Markets are generaly cautious over Lehman CDS settlement today and the relatted impact on the credit markets. Such concern will likely provide further short term support to the dollar and yen. RBA Governor Stevens said earlier today that the aggressive rate cut and fiscal stimulus will "lessen the extent of the likely slowdown in Australian's economy". Measures by central banks to improve liquity seemed to be working well and there risk of a "global catastrophe" has improved. New Zealand CPI rose 1.15% qoq in Q3, pushing yoy rate to 18 year high of 5.1% as expected. Looking ahead, the economic calendar is rather light today and main focus is on BoC which is expected to cut rates by 50bps to 2.00%. EUR/JPY Daily OutlookDaily Pivots: (S1) 134.27; (P) 136.41; (R1) 138.03; More. EUR/JPY weakens further to 133.78 today and at this point, more downside is expected as long as 138.65 minor resistance holds. Retest of 132.19 low is in favor. Break will confirm that recent down trend has resumed for next long term fibonacci level at 129.46 (50% retracement of 88.97 to 169.96). On the upside, though, above 138.65 will suggest that consolidation from 132.19 is still in progress for another test of 141.73 before completion. But still, upside should be limited below 147.03 resistance and bring down trend resumption. In the bigger picture, the sharp fall from 169.96 is still in progress and has taken out long term fibonacci level of 38.2% retracement of 88.97 to 169.96 at 139.02 without hesitation. The development so far suggests that fall from 169.96 is developing into a five wave decline and EUR/JPY is probably in the middle of it only. Medium term outlook will remain bearish as long as 147.03 support turned resistance holds and another fall is still expected even in case of correction, targeting 61.8% retracement of 88.97 to 169.96 from at 119.90.
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Economic Indicators Update
| GMT | Ccy | Events | Actual | Consensus | Previous | Revised |
|---|---|---|---|---|---|---|
| 21:45 | NZD | New Zealand CPI Q/Q Q3 | 1.50% | 1.60% | 1.60% | |
| 21:45 | NZD | New Zealand CPI Y/Y Q3 | 5.10% | 5.10% | 4.00% | |
| 6:15 | CHF | Swiss Trade balance (chf) Sep | 1.44B | 1.20B | 1.44B | |
| 10:00 | GBP | U.K. CBI industrial trend Oct | -30 | -26 | ||
| 13:00 | CAD | BOC rate decision | 2.00% | 2.50% |
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FTSE flat in early trade; profit-takers hold sway
* FTSE down 0.16 percent
* Financials mixed; profit-taking after recent rally
* Oils advance with crude; Tullow Oil up on find
* Selected miners higher; Xstrata gains after update
By Jon Hopkins
LONDON, Oct 21 (Reuters) - Britain's leading share index edged higher in early trade on Tuesday after two sessions of good gains as the lift from easier money market conditions was offset by profit-taking emerging in certain stocks.
At 0851 GMT, the FTSE 100 index .FTSE was 7.06 points or 0.16 percent lower at 4,275.61, having pulled back from an early advance to a peak of 4,347.69.
The blue chip index closed 219.66 points higher at 4,282.67 on Monday.
"After an initial spike higher on follow-on interest following gains in the market U.S. market, there is a little bit of profit-taking coming through after two sessions of gains," said Ben Timms, senior trader at Blue Index.
"In times of uncertainty, investors are often quick to take their profits, and while we like to think the positive momentum will continue there is little economic news to provide direction today, with nothing out of the U.S. and only a CBI report in the UK," Timms added.
The FTSE has gained about 11 percent in the last three trading days so far, but is down over 33 percent this year.
Selected banking issues ran into some profit-taking, notably Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), down 5.3 percent following a 23 percent gain on Monday as investors continued to assess the impact of the government bail-out on the firm's ability to grow dividends. HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) also suffered some profit-taking after its move on Monday to expand in Indonesia with the acquisition of an 89 percent stake in Bank Ekonomi (BAEK.JK: Quote, Profile, Research, Stock Buzz).
HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), however, topped the FTSE 100 leader board, up 8.1 percent, after falling on Monday, helped by supportive moves by its biggest shareholder Standard Life (SL.L: Quote, Profile, Research, Stock Buzz) on its rescue takeover by Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz), which rose 0.35 percent.
Insurer Prudential (PRU.L: Quote, Profile, Research, Stock Buzz) slipped 1 percent, paring some of Monday's gains.
Pru said its sales rose 15 percent in the first nine months of the year, and confirmed it was interested in buying parts of American International Group's (AIG.N: Quote, Profile, Research, Stock Buzz) Asian business
"Pru delivered a good set of numbers, but after good rally yesterday which saw it gain all of last week's losses, and now it is looking fairly priced," Timms said.
Fellow blue chip insurers rose, with Aviva (AV.L: Quote, Profile, Research, Stock Buzz) up 5.9 percent, Admiral Group (ADML.L: Quote, Profile, Research, Stock Buzz) ahead 3.8 percent, and Legal & General (LGEN.L: Quote, Profile, Research, Stock Buzz) up 1.8 percent.
COMMODITIES PROVIDE PROP
Commodity stocks provided the underlying strength in London as crude prices CLc1 firmed slightly, although metal prices eased back after recent strong gains, as gold
Miner Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) rose 7 percent after a third quarter trading update helped by the firm's comment that it has no significant debt refinancing requirements until 2011. [ID:nWLA716]
Elsewhere in the sector, Eurasian Natural Resources (ENRC.L: Quote, Profile, Research, Stock Buzz) added 11.6 percent, with Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz), Vedanta Resources (VED.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) up between 2.1 and 5.0 percent.
Explorer Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) was a standout gainer among blue chip energy stocks, up 6 percent after the firm and its midcap partner, Herigage Oil (HOIL.L: Quote, Profile, Research, Stock Buzz), up 16.3 percent, unveiled a significant new oil discovery in Uganda.
Fellow explorer Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) gained 4.8 percent, while integrated oils BG Group (BG.L: Quote, Profile, Research, Stock Buzz), BP (BP.L: Quote, Profile, Research, Stock Buzz), and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) added between 0.3 and 5.5 percent reflecting a steady crude price ahead of this week's OPEC meeting, as speculation mounted that the cartel may look to trim output.
Asian markets were generally higher on Tuesday, carrying on from good gains on Wall Street Monday, with U.S. stocks soaring as credit market conditions showed signs of improvement, and after comments from U.S. Federal Reserve Chairman Ben Bernanke.
In a speech on Monday, Bernanke backed government spending as a fresh measure to support the world's biggest economy following the turmoil since the collapse of Lehman Brothers. (Editing by Hans Peters)
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French banks, oils lift Europe shares 1 pct
* FTSEurofirst 300 up 1 percent
* French banks, oils top gainers
* Volkswagen continues counter-market move, falls 10 pct
By Sitaraman Shankar
LONDON, Oct 21 (Reuters) - European shares rose early on Tuesday, extending their winning streak to a third day, as investors cheered details of a French government move to bolster banks and oil shares rose as crude stayed near $75 a barrel.
At 0834 GMT, the FTSEurofirst 300 index of top European shares was up 1 percent at 937.49 points, with banks and energy stocks the top gainers.
BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) jumped 7.8 percent, Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) 9.9 percent and Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz) 14.1 percent after France outlined plans to lend 10.5 billion euros to the country's top six banks before the year end.
Among oil stocks, heavyweights Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) and Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) gained 2 percent.
Shares on Wall Street gained on Monday after Federal Reserve Chairman Ben Bernanke backed more government spending to help the economy, and Japanese stocks rose sharply on Tuesday.
"Bernanke's comments are being interpreted to mean that he wants these measures to additionally support steps taken already, and that this would prevent a U.S. recession becoming too entrenched," said UniCredit strategist Tammo Greetfeld in Munich.
UniCredit changed its stance on European equities to "overweight" from "underweight" last week, and Greetfeld said that he expected recent measures to address interbank and interest rate fears, adding that shares already priced in a recession.
Swiss drugmaker Roche (ROG.VX: Quote, Profile, Research, Stock Buzz) was a heavily weighted loser on the pan-European index, falling 2 percent after it posted a fall in nine-month sales.
Volatile Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz) shares fell 10 percent, adding to recent big falls after a series of gains against the market trend attributed by traders to a short squeeze.
British banks HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) and Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) fell 3.7 and 5.4 percent after sharp gains on Monday.
A YEAR TO FORGET
Despite gains on Friday and Monday, the FTSEurofirst 300 remains on track for its worst month since September 2002, as worries over the economy replaced fears of bank collapses once governments across the world moved to bail out lenders.
The index has fallen 11.9 percent in October and 38 percent so far this year, lifting its dividend yield to 5.5 percent, well above the 3.96 percent offered by 10-year European government bonds
Tech stocks were weaker after U.S. chipmaker Texas Instruments (TXN.N: Quote, Profile, Research, Stock Buzz) issued a disappointing outlook.
Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz), Ericsson (ERICb.ST: Quote, Profile, Research, Stock Buzz) and Infineon (IFXGn.DE: Quote, Profile, Research, Stock Buzz) fell 0.7-2.5 percent.
Renewable Energy (REC.OL: Quote, Profile, Research, Stock Buzz) slid 8.5 percent after the Norwegian group posted a smaller-than-expected rise in core earnings for the third quarter.
The focus shifts to U.S. earnings later in the day, with drugmaker Pfizer (PFE.N: Quote, Profile, Research, Stock Buzz), diversified manufacturer 3M (MMM.N: Quote, Profile, Research, Stock Buzz) chemicals group DuPont (DD.N: Quote, Profile, Research, Stock Buzz) and computer maker Apple (AAPL.O: Quote, Profile, Research, Stock Buzz) among a clutch of companies due to report. (Editing by Quentin Bryar)
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S.Korea bails out builders; Lee warns on economy
By Jack Kim and Cheon Jong-woo
SEOUL, Oct 21 (Reuters) - South Korea on Tuesday said it would spend about $4 billion to prop up its wilting construction industry, the second major package this week as it grapples with the impact of the global financial storm on its economy.
President Lee Myung-bak said the credit crunch around the world made South Korea's economic situation even more grave than the Asian financial crisis a decade ago, which pushed the country to the edge of default.
"The overall situation is more serious than the 1997 crisis. Back then it was an Asian crisis but today the entire world economy is at risk," a presidential spokesman quoted Lee as saying during a cabinet meeting.
"It's not like any recovery of our own means we will have escaped the effects of the (global) crisis," Lee said.
The latest package, which follows Sunday's $130 billion rescue for the credit-squeezed financial system, will allocate over 5 trillion won ($3.8 billion) to the construction sector whose problems the government fears could ricochet through the slowing economy.
"It is feared troubles in sectors of the real economy, such as the construction industry, could make things worse in the financial sector as well," the government said in a statement.
The money will be used to buy unsold new homes and land from domestic builders who want to pay off debt.
"(The steps) are intended to help ease the tax and financial burden on households while boosting demand for homes ... (The government) aims to offer financial support to construction firms on condition that they also make efforts at self-rescue."
Analysts welcomed the move, but held out little hope for demand in the ailing Korean property sector.
"It will obviously help the sentiment after all the scary rumours about how even major construction firms are in trouble," said Lee Kwang-soo, an analyst at Tong Yang Inv Bank. "But the benefits are overshadowed by risks from the macroeconomic fundamentals, such as financial sector troubles and interest rate burdens."
The fourth biggest economy in Asia has looked especially exposed to the financial turmoil, prompting the government on Sunday to rush to the rescue of its financial system whose strength is being sapped by a shortage of liquidity and the prospect of weaker economic growth next year.
South Korea's financial markets appeared to regain their composure after some of the most volatile price swings in a decade, but returned to the downward trend as investors started looking ahead to a prolonged period of economic gloom.
Seoul's main share index closed above recent three-year lows, but 1 percent lower for the day at 1,196.10 points. The won, one of Asia's worst hit currencies with a fall of around 30 percent so far this year, also finished local trading slightly lower at 1,320.0/0/.4 per dollar, even as local authorities were spotted selling dollars to help the won.
UNWANTED HOMES
Promising 2 trillion won for unwanted homes and the other 3 trillion for land purchases, the government said state-run credit guarantee agencies would help builders sell bonds more easily by providing credit guarantees. It may also ease rules on home-backed loans in the greater Seoul area next month.
The moves fell short of some media expectations for a 12 trillion won injection into the building industry, which is heavily indebted to South Korea's banks.
"Yes the amount did come out smaller than the media had reported, but that does not worry us," said Kang Seung-min, analyst at NH Investment & Securities.
"What the builders needed the most was easier financial regulations on real estate transactions and it was sort of granted as it hinted at easing restrictions in home-backed loans in greater Seoul area," he added.
The government opened the taps on the loan guarantees, spreading out the promised $100 billion worth among 18 local banks, including state-owned Korea Development Bank and Woori Bank [ID:nSEO337807].
Also making good on promises to ensure liquidity in South Korean financial markets the central bank said it had provided $1.52 billion out of a planned $2.5 billion in in three month swap deals to local banks.
The Bank of Korea said last week it would supply dollars into the local swap market to help ease persistent dollar-funding shortages amid the global financial crisis. (Additional reporting by Yoo Choonsik, Rhee So-eui and Park Jung-youn; writing by Keiron Henderson, editing by Jonathan Thatcher and Tomasz Janowski)
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FACTBOX-Corporate spending on sport in North America
CHICAGO, Oct 21 (Reuters) - As fears of a global recession
rise, U.S. sports executives are left to wonder whether
companies in North America will cut spending on advertising,
sponsorships, tickets and other areas related to sports.
Below are some statistics on sports sponsorships and
marketing.
The biggest North American-based corporate spenders in 2007
on sports sponsorships:
1. Anheuser-Busch Cos Inc
2. Pepsico Inc
3. Coca-Cola Co
4. Nike Inc
5. General Motors Corp
6. Toyota Motor Corp
7. Miller Brewing Co, a unit of SABMiller PLC
8. Sprint Nextel Corp
9. AT&T Inc
10. Visa Inc
11. McDonald's Corp
12. Bank of America Corp
Source: IEG Sponsorship Report
The financial services sector has been especially hard hit
by bad mortgage debt and tighter credit markets. That sector
historically has been a big spender on sports.
In 2007, financial services companies based in North America
divided their sponsorship money across a broad array of sports,
favoring auto racing and sporting venues:
Auto racing -- 18 percent
Arena/stadium -- 15 percent
Golf -- 8 percent
Soccer -- 8 percent
Football -- 8 percent
Olympic sports -- 6 percent
Baseball -- 5 percent
Ice hockey -- 3 percent
Sailing -- 3 percent
Tennis -- 3 percent
Other -- 22 percent
Source: IEG Sponsorship Report
Sports up to now have been a popular way for advertisers to
reach consumers, but many analysts said that spending may drop
in the near term due to the economy.
Top 10 advertisers as ranked by millions of dollars spent at
major TV sports events.
Company Oct '07- Oct '06- Pct
Sept '08 Sept '07 change
General Motors Corp $130.1 $132.0 -1.4
Anheuser-Busch Cos Inc $68.1 $64.5 +5.6
AT&T Inc $62.4 $36.5 +71.0
Pepsico Inc $62.0 $40.4 +53.5
Coca-Cola Co $47.6 $41.3 +15.3
SABMiller Plc $32.8 $22.6 +45.1
Yum Brands Inc $32.5 $29.5 +10.2
U.S. government $27.1 $18.6 +45.7
Ford Motor Co $25.3 $24.8 +2.0
Verizon Communications $24.9 $16.3 +52.8
Note: Sporting events cited in ranking include Major League
Baseball's World Series in October, the NCAA college football
bowl games in January, the National Football League's Super Bowl
in February, the NCAA men's basketball tournament in March and
the National Basketball Association's finals in October.
Source: TNS Media Intelligence
(Compiled by Ben Klayman, editing in London by Jon Bramley)
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Nikkei gains for 3rd day, U.S. economic steps eyed
*Nikkei rises 3 pct, now up 10 pct over 3 days
*Attention on dollar moves against yen, earnings
*Market also awaits U.S. economic steps (Adds stocks, details)
By Elaine Lies
TOKYO, Oct 21 (Reuters) - Japan's Nikkei average rose 3.3 percent on Tuesday for a third day of gains as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) and other exporters climbed on a weaker yen, with attention focused on action the United States might take to shore up its economy. Investors also honed in on news about company results as Japan's earnings season moves into higher gear.
Takeda Pharmaceutical (4502.T: Quote, Profile, Research, Stock Buzz) jumped after the top Japanese drugmaker upgraded its April-September earnings guidance, citing stronger than expected sales and the softer yen. [ID:nT307697] Energy-linked firms and trading houses gained as oil rose over $1 on expectations of production cuts and forecasts of cold weather in the U.S. northeast, as well as hopes that the worst of the financial crisis may be over [O/R].
The benchmark Nikkei has advanced 10 percent in the last three trading days, but still is down 17.4 percent this month.
Market players were torn between hopes for U.S. policy moves and fears that it may take time to come up with constructive and specific steps.
"The market wants some kind of concrete economic steps, jointly if necessary, and Bernanke's comments have raised hopes that something will be forthcoming," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"But this could take time given the upcoming U.S. presidential election and with Bush leaving office in January."
Federal Reserve Chairman Ben Bernanke told Congress on Monday that another wave of government spending may be needed as the U.S. economy limps through what could be an extended period of subpar growth. [ID:nN20514882]
Current G8 chair Japan has agreed with the United States to work closely to make a planned world summit on the financial crisis a success, the Japanese government's top spokesman said on Tuesday. [ID:nT338799]
Market participants said much of the day's activity centred on day traders and others carrying out short-term trades.
"There are some nerves about what might happen in New York later today, and this may be limiting rises," said Masayoshi Okamoto, chief of dealing at Jujiya Securities.
Like Tokyo, New York has rebounded for several sessions, and some market players said they wondered how long this would go on, noting that the United States is also in its earnings season.
The benchmark Nikkei .N225 gained 300.66 points to 9,306.25. The broader Topix rose 3.2 percent to 956.64.
DOLLAR, EARNINGS, OIL
The dollar was fetching around 101.51 yen.
Canon rose 5.5 percent to 3,460 yen and Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) climbed 6.8 percent to 2,435 yen. Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) rose 5 percent to 3,790 yen.
Takeda gained 6 percent to 4,920 yen, its rise typical of the intense market focus on earnings.
"The market is extremely nervous about earnings right now, although most investors are expecting more downward revisions than upward," Chibagin Asset's Osakabe said.
Oil's gains sent oil and gas field developer Inpex Inc (1605.T: Quote, Profile, Research, Stock Buzz) soaring 9.6 percent to 683,000 yen.
Mitsubishi Corp (8058.T: Quote, Profile, Research, Stock Buzz), Japan's largest trading house, gained 6.2 percent to 1,848 yen and fellow trading house Mitsui & Co (8031.T: Quote, Profile, Research, Stock Buzz) gained 7.5 percent to 1,074 yen.
Trade was light on the Tokyo exchange's first section, with 2.1 billion shares changing hands, compared with last week's daily average of 2.4 billion.
Advancing stocks outpaced declining ones by more than 3 to 1. (Reporting by Elaine Lies; Editing by Edwina Gibbs)
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Singh Aide Says Bush Summits May Just Produce `Lot of Noise'
By Cherian Thomas and Simon Kennedy
Oct. 21 (Bloomberg) -- World leaders may fail to revamp the global economy because of transatlantic differences over how to regulate banks, said Saumitra Chaudhuri, an economic adviser to Indian Prime Minister Manmohan Singh.
The risk is that a European drive for stiffer regulation and supervision for cross-border banks will run into opposition from the U.S., meaning the talks may yield ``nothing concrete except a lot of noise,'' said Chaudhuri in a telephone interview yesterday.
Leaders from rich and developing nations are planning to meet for a series of summits, U.S. President George W. Bush and his French counterpart, Nicolas Sarkozy, said after talks on Oct. 18. The first will be held in the U.S. in coming weeks and focus on ways to avoid a repeat of the financial crisis that's pushing the global economy to the brink of recession.
``The problem is the U.S. and Europe have completely different banking systems,'' said Chaudhuri. ``How can they think in terms of uniform regulatory norms because banking systems are very different.''
The U.S. hasn't committed itself to the broad terms of Europe's agenda. Ideas ``have been brought forward by individual countries,'' White House spokeswoman Dana Perino told reporters on Oct. 17. ``There are other countries that are going to have ideas as well.''
Sarkozy's Goal
Sarkozy said on Oct. 18 that leaders ``must reform capitalism so that the most efficient system ever created doesn't destroy its own foundations.'' British Prime Minister Gordon Brown has said each of the world's top 30 banks should be under the supervision of a panel of regulators from the countries where those institutions do business. Both leaders have pushed for the culture of the banking industry to change, demanding fewer bonuses and less reliance on high-risk trading.
Bush has been less sweeping, calling for a debate of ``good ideas from around the world.'' He cautioned after meeting with Sarkozy that ``it is essential we preserve the foundations of democratic capitalism.''
Any deal to rewire the international financial architecture would echo the 1944 Bretton Woods agreement that fixed exchange rates and created the International Monetary Fund and the World Bank. The European leaders are trying to capitalize after U.S. Treasury Secretary Henry Paulson followed Brown's lead in injecting money into loss-ridden banks in return for equity.
``Europe has a tremendous sense of angst that they suffered because of the U.S.,'' said Chaudhuri. He added that another obstacle to reform is that it's ``very difficult'' for heads of state to understand finance given that it's ``technically incomprehensible even for 99.99999 percent of people'' who work in the industry.
To contact the reporter on this story: Cherian Thomas in New Delhi at Cthomas1@bloomberg.net; Simon Kennedy in Paris at Skennedy4@bloomberg.net
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Oct. 21 (Bloomberg) -- World leaders may fail to revamp the global economy because of transatlantic differences over how to regulate banks, said Saumitra Chaudhuri, an economic adviser to Indian Prime Minister Manmohan Singh.
The risk is that a European drive for stiffer regulation and supervision for cross-border banks will run into opposition from the U.S., meaning the talks may yield ``nothing concrete except a lot of noise,'' said Chaudhuri in a telephone interview yesterday.
Leaders from rich and developing nations are planning to meet for a series of summits, U.S. President George W. Bush and his French counterpart, Nicolas Sarkozy, said after talks on Oct. 18. The first will be held in the U.S. in coming weeks and focus on ways to avoid a repeat of the financial crisis that's pushing the global economy to the brink of recession.
``The problem is the U.S. and Europe have completely different banking systems,'' said Chaudhuri. ``How can they think in terms of uniform regulatory norms because banking systems are very different.''
The U.S. hasn't committed itself to the broad terms of Europe's agenda. Ideas ``have been brought forward by individual countries,'' White House spokeswoman Dana Perino told reporters on Oct. 17. ``There are other countries that are going to have ideas as well.''
Sarkozy's Goal
Sarkozy said on Oct. 18 that leaders ``must reform capitalism so that the most efficient system ever created doesn't destroy its own foundations.'' British Prime Minister Gordon Brown has said each of the world's top 30 banks should be under the supervision of a panel of regulators from the countries where those institutions do business. Both leaders have pushed for the culture of the banking industry to change, demanding fewer bonuses and less reliance on high-risk trading.
Bush has been less sweeping, calling for a debate of ``good ideas from around the world.'' He cautioned after meeting with Sarkozy that ``it is essential we preserve the foundations of democratic capitalism.''
Any deal to rewire the international financial architecture would echo the 1944 Bretton Woods agreement that fixed exchange rates and created the International Monetary Fund and the World Bank. The European leaders are trying to capitalize after U.S. Treasury Secretary Henry Paulson followed Brown's lead in injecting money into loss-ridden banks in return for equity.
``Europe has a tremendous sense of angst that they suffered because of the U.S.,'' said Chaudhuri. He added that another obstacle to reform is that it's ``very difficult'' for heads of state to understand finance given that it's ``technically incomprehensible even for 99.99999 percent of people'' who work in the industry.
To contact the reporter on this story: Cherian Thomas in New Delhi at Cthomas1@bloomberg.net; Simon Kennedy in Paris at Skennedy4@bloomberg.net
Read more...
CITIC Pac,China Mobile drag HK shares down 1.8 pct
* Volatile market ends 1.8 pct lower amid low turnover
* China Mobile slides on disappointing earnings
* CITIC Pacific plunges on forex loss warning
* China Shenhua gains on stronger commodity prices, upgrade
(Updates to close)
By Parvathy Ullatil
HONG KONG, Oct 21 (Reuters) - Hong Kong shares erased a firm start to fall 1.8 percent on Tuesday, with CITIC Pacific losing more than half its market value after it warned of forex losses and China Mobile, Asia's largest wireless carrier, sliding on disappointing earnings.
Shares in CITIC Pacific (0267.HK: Quote, Profile, Research, Stock Buzz) hit a 17-year low of HK$6.52, notching up their biggest percentage drop ever, at 55.1 percent, after the Chinese steel-to-property conglomerate warned of potential foreign exchange losses of nearly $2 billion.
"There is much more to come in the way of profit warnings and trading losses. With the economy getting hit from every direction there will be more companies hurt by falling commodity prices and fluctuating currencies," said Linus Yip, strategist with First Shanghai Securities.
"We have been advising clients to be extra cautious with investing in manufacturing companies that hedge on raw materials."
The benchmark Hang Seng Index .HSI closed 281.84 points lower at 15,041.17 after opening 1.9 percent higher. The index fell to 14,884.07 earlier.
Asia's largest wireless service operator, China Mobile (0941.HK: Quote, Profile, Research, Stock Buzz), fell 5 percent after it posted lower-than-expected quarterly earnings amid slowing growth in China's economy.
But shares in fixed-line operator China Telecom (0728.HK: Quote, Profile, Research, Stock Buzz), which posted an anaemic 1.3 percent increase in its third-quarter net profit, gained 1.1 percent as its results were in line with analysts' expectations.
Mainboard turnover dipped to HK$50.7 billion ($6.5 billion) from Monday's HK$53.7 billion.
"Many other Asian markets have also been moving in this directionless manner, suggesting that confidence in the market is yet to be restored," said Steven Leung, sales director with UOB Kay Hian.
Seoul's KOSPI also gave up early gains to drift lower on Tuesday, while the Shanghai Composite Index .SSEC seesawed in and out of positive territory before closing lower. Early gains were spurred by U.S. Federal Reserve chairman Ben Bernanke's support for another round of government spending to shore up the ailing economy.
The China Enterprises Index .HSCE of top locally listed mainland Chinese companies fell 2.3 percent to 7,267.12.
Oil stocks jumped after crude prices gained more than 1 percent, rising for a third consecutive session on expectations that OPEC will cut output this week to lift prices.
Offshore oil specialist CNOOC (0883.HK: Quote, Profile, Research, Stock Buzz) led gainers on the main index with a 3.3 percent rally.
China Shenhua Energy (1088.HK: Quote, Profile, Research, Stock Buzz), the world's most valuable coal miner, jumped nearly 11 percent amid stronger international commodity prices on improving credit market conditions. The stock scaled back gains to close 5.3 percent higher.
Credit Suisse upgraded the stock to outperform from neutral on Tuesday, citing the company's defensive strength amid fluctuating coal prices.
Chinese financial and property stocks retreated as investors locked in gains from Monday's steep increases in these counters.
Top lender ICBC (1398.HK: Quote, Profile, Research, Stock Buzz) fell 3.4 percent, while the nation's biggest insurer, China Life (2628.HK: Quote, Profile, Research, Stock Buzz), dropped 3.7 percent.
Shares in Singamas Container Holdings (0716.HK: Quote, Profile, Research, Stock Buzz) clawed back 15.7 percent from Monday's steep drop after the world's No. 2 shipping container maker told Reuters it would remain profitable in 2008 despite a challenging industry environment and lower output this year. [ID:nHKG74429]
Fears that the global credit crunch will hurt highly geared companies, such as Singamas, sent shares of the firm down more than 30 percent on Monday. (Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)
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