Stocks: Wednesday's review
Asian shares made faltering headway as tech stocks rallied but soft manufacturing data from China heightened concerns about global economic growth and kept gains in check.
A profit warning from Nokia, the Finnish mobile phone maker, in the previous session helped lift its Asian rivals as it reported falling market share.
Samsung climbed 1 per cent to Won911,000 while rival LG Electronics added 1.3 per cent to Won98,500. Taiwan’s HTC gained 2.1 per cent to T$1,245 and Hon Hai Precision Industry, which assembles Apple’s iPhones and iPads, rose 1.5 per cent to T$102.
Trading in Tokyo was choppy amid growing domestic political concerns. Naoto Kan, Japan’s prime minister, this week will face his second vote of no-confidence in less than a year.
Sony rose 0.8 per cent to Y2,180 after the consumer electronics group said it would look to reduce operating losses in its television business by at least half in the current fiscal year through to March 2012.
European stocks declined the most in a week after U.S. employment and manufacturing data trailed economists’ forecasts and China’s factory production expanded at the slowest pace in nine months.
China’s manufacturing growth eased in May as the government extended a campaign to cool inflation and the property market. The Purchasing Managers’ Index dropped to 52 from 52.9 in April, the China Federation of Logistics and Purchasing said.
A gauge of manufacturing in the 17-nation euro area slipped to 54.6 in May from 58 in April, London-based Markit Economics said today. That fell short of the initial estimate of 54.8 released on May 23. A reading of more than 50 indicates growth.
Banca Monte dei Paschi SpA sank the most in two years as the Italian lender’s controlling shareholder sold 450 million shares.
KBC Groep NV (KBC) lost 6.2 percent after a report the Belgian bank is considering a 2 billion-euro ($2.9 billion) share sale.
BG Group Plc (BG/) and Repsol YPF SA (REP) led a retreat in energy stocks as crude oil declined in New York.
Outokumpu Oyj (OUT1V) surged 3.8 percent to 10.63 euros after the Finnish steel maker sold a 4.3 percent stake in Talvivaara Mining Co. to Solidium Oy, which manages the shareholdings of the Finnish state.
Axa SA (CS) gained 1.5 percent to 15.06 euros after Canada’s Intact Financial said it will buy Axa’s Canadian business to increase its premiums in the country by almost 50 percent. The French insurer also said it’s seeking average annual growth in underlying earnings per share of 10 percent to 2015.
A triple dose of bad news sent stocks sharply lower Wednesday afternoon, with all three indexes set to have their worst day in months.
The day started with two disappointing U.S. economic reports that exacerbated fears about a slowdown in the recovery. And late in the trading session, Greece's debt got slapped with yet another downgrade.
The Dow Jones industrial average (INDU) fell 245 points, or 2%, with all but one of the blue chip index's 30 components lagging. Bank of America (BAC, Fortune 500), Caterpillar (CAT, Fortune 500) and Alcoa (AA, Fortune 500) were the worst performing stocks on the blue-chip index.
Economy: The first of this week's jobs-related economic reports showed that the pace of planned job cuts edged higher in May, according to a report from outplacement consulting firm Challenger, Gray & Christmas.
A separate report by ADP showed private-sector payrolls added only 38,000 jobs in May. The number fell well below the 170,000 private sector jobs economists were expecting, according to an estimate from Briefing.com.
The Commerce Department said construction spending rose 0.4% in April, following a 0.1% rise the previous month. Economists were expecting spending to drop 1%.
Companies: Shares of Marathon Oil (MRO, Fortune 500) slipped 3% after the Houston-based company said it is buying oil and natural gas fields within the state's Eagle Ford shale formation for $3.5 billion.
Telvent (TLVT)'s stock jumped more than 15% following news that the energy software company will be acquired by Schneider Electric for $1.4 billion.
Shares of JoS A. Bank Clothiers (JOSB) tumbled 14% after the men's clothing retailer's first-quarter profit failed to meet Wall Street's expectations.