Stocks: Monday's review
Japan’s Nikkei 225 Stock Average sank 1.8 percent after foreign minister Seiji Maehara quit over an illegal donation, hurting Prime Minister Naoto Kan’s battle to fund Japan’s budget and avoid calls for an early election.
Kajima Corp. dropped 2.3 percent to 209 yen in Tokyo after Kyodo News reported that the company and its partners may incur a loss of more than 80 billion yen as a highway project in Algeria didn’t proceed as planned and costs rose.
Among its partners, Taisei Corp. dropped 1.1 percent to 185 yen, Nishimatsu Construction Co. lost 1.8 percent to 112 yen and Hazama Corp. slid 2.6 percent to 74 yen.
Exporters declined on speculation surging oil prices and growing unrest in the Middle East and North Africa will cut global demand for goods and services.
Honda Motor Co., which counts the U.S. as its biggest market, sank 3.1 percent to 3,435 yen in Tokyo. Sony Corp., the maker of Bravia of televisions and PlayStation game consoles, lost 1.8 percent to 2,926 yen.
Most European stocks declined as oil climbed above $105 a barrel amid escalating violence in Libya, while takeover activity boosted Bulgari SpA and Tognum AG.
Inmarsat Plc dropped 13 percent as sales missed estimates. Bulgari soared 59 percent after LVMH Moet Hennessy Louis Vuitton SA agreed to buy the world’s third-largest jeweller for about 3.7 billion euros ($5.2 billion).
The Stoxx Europe 600 Index slipped 0.4 percent to 280.73 at the close in London. The gauge has declined 3.6 percent from this year’s highest level reached Feb. 17 as concern grew about unrest in the Middle East and European Central Bank President Jean-Claude Trichet said he may increase interest rates.
U.S. stocks slid, erasing last week’s advance, as escalating violence in Libya sent oil higher and chipmakers tumbled after Wells Fargo & Co. reduced its recommendation on the industry.
Intel Corp., the world’s largest chipmaker, slid 2.1 percent following Wells Fargo’s downgrade, while Micron Technology Inc. lost 5.9 percent. JDS Uniphase Corp. fell the most in the Standard & Poor’s 500 Index after competitor Ciena Corp.’s revenue forecast missed analysts’ estimates. Alcoa Inc., Walt Disney Co. and Boeing Co. lost at least 2.4 percent to lead declines in the Dow Jones Industrial Average.
The S&P 500 tumbled 1.2 percent to 1,305.36 at 1:08 p.m. in New York after climbing 0.5 percent earlier. The Dow declined 119.39 points, or 1 percent, to 12,050.49. Oil for April delivery surged 1.4 percent at $105.85 a barrel.
The S&P 500 fell 0.7 percent on March 4, trimming a weekly advance, as the surge in oil fueled concern consumer spending may slow as Labor Department data showed average hourly earnings were unchanged last month.
The S&P 500 has lost 2.7 percent from a 32-month high on Feb. 18 amid concern higher energy prices will hurt consumer spending and corporate profits. The index is still up 93 percent from its bear-market low almost two years ago as improving corporate profits, government stimulus efforts and takeovers fueled confidence in equities.
Oil rose to a 29-month high as escalating violence in Libya bolstered concern that supply disruptions may spread through the Middle East. Crude climbed as much as 2.4 percent after fighting between Libyan rebels and troops loyal to Muammar Qaddafi intensified. Hedge funds raised purchases of futures to a record for a second week on speculation unrest will cut output further. Citigroup Inc. increased its Brent oil price estimate, saying the threat of more disruptions supports a “fear premium.”