Stocks: Weekly’s review
Asian stocks fell, ending a six-day winning streak for the regional benchmark index, after credit- rating downgrades of Spain and European banks fueled concern the region’s debt crisis slow global growth. Chinese companies tumbled as a report showed continued high inflation, lessening the chances of monetary-policy easing in the world’s second-largest economy.
Asian markets retreated after Spain had its long-term sovereign credit rating cut to AA- from AA by Standard & Poor’s with a negative outlook, the third reduction by S&P in three years.
Nikkei 225 8,748 -75.29 -0.85%, Hang Seng 18,502 -256.02 -1.36%, S&P/ASX 200 4,206 -38.90 -0.92%, Shanghai Composite 2,431 -7.42 -0.30%
Sino-Ocean Land Holdings Ltd., a developer of properties in China’s north, slumped 10 percent to HK$2.99. China Overseas Land & Investment Ltd., a builder controlled by the nation’s construction ministry, retreated 4.2 percent to HK$13.60 on concern China may continue with steps to slow inflation. Industrial & Commercial Bank of China Ltd., the nation’s biggest lender by market value, sank 4.3 percent to HK$4.25.
BHP Billiton lost 2.1 percent to A$36.86 in Sydney and rival Rio Tinto Group, the world’s No. 2 miner by sales, declined 1.5 percent to A$68.30. Cnooc Ltd., China’s largest offshore energy producer, slumped 4.6 percent to HK$13.28.
Esprit Holdings Ltd., a clothier that gets 83 percent of its revenue in Europe, dropped 1.5 percent in Hong Kong.
Carmaker Honda Motor Co. lost 2.4 percent to 2,248 yen in Tokyo, while Canon Inc., a camera maker that depends on Europe for about a third of its sales, slipped 2.6 percent to 3,445 yen.
Mitsubishi UFJ fell 1.5 percent to 335 yen in Tokyo, while HSBC Holdings Plc, Europe’s biggest lender, slipped 1.5 percent to HK$63.70 in Hong Kong.
European stocks climbed, extending the Stoxx Europe 600 Index’s longest stretch of weekly gains in six months, as Group of 20 finance ministers meet in Paris to discuss the euro area’s debt crisis.
G-20 finance ministers and central bankers meet in Paris today and tomorrow to outline a euro-area rescue plan that may include deeper investor losses on Greek bonds and increased firepower for the International Monetary Fund. Leaders may complete the plan at an Oct. 23 summit in Brussels to present to a gathering of G-20 chiefs Nov. 3-4.
Stocks climbed today even after Standard & Poor’s downgraded Spain’s credit rating for the third time in three years as slowing growth and rising defaults threaten banks. The rating company reduced Spain’s ranking by one level to AA-, S&P’s fourth-highest investment grade, with the outlook remaining negative, in a statement late yesterday. Separately, UBS AG, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc had long-term issuer default grades cut by Fitch Ratings, which put more than a dozen other lenders on watch negative.
National benchmark indexes rose in all 18 western European markets except Iceland and Denmark. The U.K.’s FTSE 100 Index rose 1.2 percent and Germany’s DAX Index gained 0.9 percent. France’s CAC 40 Index advanced 1 percent.
Syngenta AG led chemical makers higher, rising more than 1 percent after posting third-quarter sales that beat analysts’ estimates.
SAP AG rallied 2.1 percent after the software maker reported higher earnings. Xstrata Plc led mining shares higher as copper rebounded in London.
Wacker Chemie AG rallied 3.3 percent to 76.01 euros. Clariant AG, which said it raised 365 million euros ($506 million) by issuing three-year certificates, climbed 3 percent to 9.69 francs. Yara International ASA advanced 3 percent to 250.40 kroner.
Xstrata led mining shares higher, climbing 3.1 percent to 974.1 pence. Antofagasta Plc advanced 3.7 percent to 1,118 pence and Rio Tinto Group gained 1.9 percent to 3,345.5 pence. Copper rebounded in London, climbing as much as 3.7 percent after customs figures yesterday showed imports of the metal into China, the world’s largest consumer, reached a 16-month high. Zinc, tin and nickel also advanced.
BowLeven Plc soared 60 percent to 120.75 pence, its biggest gain since 2009, after the U.K.-listed oil explorer focused on Africa said it discovered oil from an exploration well. The Sapele-3 well in the Douala Basin at the Etinde permit encountered 11 meters of net pay and the reservoir appears to be of “good quality,” the company said.
Sulzer AG paced declining shares, falling 8.8 percent to 94.10 francs after the Swiss maker of pumps predicted a slowdown in order growth for the full year as customers hesitate to invest amid rising economic uncertainty.
UPM-Kymmene Oyj dropped 6.1 percent to 8.80 euros after Europe’s second-largest papermaker reversed its full-year earnings forecast and predicted operating profit will fall rather than rise.
Finmeccanica SpA lost 1.4 percent to 5.32 euros after HSBC Holdings Plc lowered its recommendation for Italy’s biggest military contractor to “underweight” from “neutral.”
U.S. stocks advanced, giving the Standard & Poor’s 500 Index its biggest weekly gain since July 2009, as retail sales beat economists’ estimates and the Group of 20 nations began discussions on Europe’s debt crisis.
U.S. equities gained as retail sales in the U.S. rose more than forecast in September, easing concern slumping confidence and scant hiring will derail the biggest part of the economy.
U.S. stocks also followed a rally in European shares as finance ministers and central bankers from the Group of 20 began talks in Paris. Nations from China to Brazil are considering increasing the International Monetary Fund’s lending resources to help stem the European debt crisis, Group of 20 and IMF officials said. European officials are considering writedowns of as much as 50 percent on Greek bonds, according to people familiar with the discussion.
Dow 11,644.49 +166.36 +1.45%, Nasdaq 2,667.85 +47.61 +1.82%, S&P 500 1,224.58 +20.92 +1.74%
Google Inc., the world’s biggest Internet-search company, jumped 5.9 percent after sales topped projections. Apple Inc. gained 3.3 percent as the company is poised to sell as many as 4 million units of its new iPhone 4S this weekend after customers lined up to buy one of the last products developed under Steve Jobs.
Amazon.com Inc. and Caterpillar Inc. added at least 3.2 percent, pacing gains among сompanies most-tied to the economy.
Energy and raw-material producers rose the most among 10 industry groups in the S&P 500, adding at least 2.5 percent. Exxon Mobil Corp. climbed 2.3 percent to $78.11. Chevron Corp. added 2.7 percent to $100.47. Freeport-McMoRan Copper & Gold Inc. gained 4.3 percent to $36.77. Stabilizing copper inventory worldwide and rising demand from China are “favorable” for the world’s largest publicly traded copper producer.