Stocks: Monday’s review
Asian stocks rose, extending the biggest weekly gain since March on the region’s benchmark index, after Group of 20 finance chiefs meeting in Paris endorsed parts of a plan to contain Europe’s debt crisis.
The MSCI Asia Pacific Index advanced 1.9 percent. Japan’s Nikkei 225 Stock Average climbed 1.5 percent and Australia’s S&P/ASX 200 Index gained 1.7 percent. Hong Kong’s Hang Seng Index advanced 2 percent while Shanghai’s Composite Index added 0.4 percent.
Commodity and consumer stocks led advances among the Asian benchmark’s 10 industry groups. BHP Billiton rallied 2.1 percent in Sydney, while rival Rio Tinto Group added 2.4 percent. S-Oil Corp., South Korea’s third-largest crude refiner, surged 8.9 percent, and Korea Zinc Co., which also produces gold and silver, advanced 2.5 percent.
Mitsubishi Corp., a Japanese commodities trading company, surged 3.5 percent to 1,615 yen. Cnooc Ltd. rose 3.3 percent in Hong Kong after the state-run Xinhua News Agency said the company finished cleaning up an oil spill in China’s Bohai Bay, prompting the government to lift its emergency response to earlier leakages.
Esprit surged 7.9 percent in Hong Kong, leading Asia’s exporters higher. Sony rose 5 percent to 1,607 yen after Sony Ericsson Mobile Communications AB posted third-quarter sales and pretax profit that exceeded analysts’ estimates as sales climbed in Asia.
Nissan Motor Co., a carmaker that gets about 80 percent of its sales overseas, gained 2.1 percent to 728 yen. Rival Honda Motor Co. added 3.6 percent to 2,329 yen. James Hardie Industries SE, a building-materials supplier that gets more than 70 percent of its sales from the U.S, climbed 2 percent to A$5.70 in Sydney.
Asian financial shares also climbed. National Australia Bank gained 1.9 percent and Commonwealth Bank of Australia, the nation’s largest by market value, climbed 1.9 percent in Sydney. HSBC Holdings Plc, Europe’s biggest lender, rose 2 percent in Hong Kong, while in Tokyo, Nomura Holdings Inc., Japan’s largest brokerage, jumped 3.4 percent to 301 yen.
Mitsubishi UFJ Financial Group Inc. advanced 1.8 percent after its Mitsubishi UFJ Morgan Stanley Co. joint venture said it plans to quadruple job cuts in Japan after the number of staff who accepted early retirement offers exceeded the brokerage’s initial estimate.
Among stocks that fell today, Olympus plunged 24 percent to 1,555 yen in Tokyo. At least six brokerages cut their ratings on the optical-equipment maker after Michael C. Woodford was dismissed as president on Oct. 14 amid a row with the board over fees paid during the 2008 purchase of Gyrus Group Plc.
European stocks fell as a German government spokesman said that euro-area leaders will not provide a complete fix to the debt crisis at their next meeting.
G-20 finance ministers and central bank governors concluded weekend talks in Paris endorsing parts of the emerging plan to avoid a Greek default, bolster banks and curb contagion. Stocks erased earlier gains after Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman, told reporters in Berlin that European leaders won’t fulfill “dreams” of a quick end to the debt crisis at the Oct. 23 summit.
National benchmark indexes fell in all of the 18 western- European markets. France’s CAC 40 Index slipped 1.6 percent. Germany’s DAX Index lost 1.8 percent and the U.K.’s FTSE 100 Index fell 0.5 percent. Greece’s ASE Index plunged 3 percent.
National Bank of Greece sank 10 percent to 1.63 euros. Piraeus Bank SA retreated 9.1 percent to 26 euro cents. EFG Eurobank Ergasias tumbled 9.5 percent to 66.1 euro cents.
G4S Plc slumped 22 percent to 219.9 pence for its biggest slump in seven years. The world’s largest security provider agreed to acquire ISS for about 5.2 billion pounds ($8.2 billion), of which 3.7 billion pounds is assumed debt, to add cleaning and other facilities-management services and accelerate expansion in emerging markets.
BP Plc rose 2.2 percent to 425.55 pence. BP, Europe’s second-largest oil company, said Anadarko will pay to settle all claims over the world’s largest accidental oil spill.
SGL Carbon SE soared 13 percent to 42.75 euros, its highest price since August 2008. Bayerische Motoren Werke AG plans to buy a stake in the German maker of carbon and graphite materials, Spiegel said, citing an unidentified manager at the automaker.
Air France-KLM Group, Europe’s second-largest airline by sales, increased 1.4 percent to 5.61 euros. The company’s board meets today to vote on ousting Chief Executive Officer Pierre- Henri Gourgeon, according to two people with knowledge of the proposals.
U.S. stocks declined, after the biggest weekly gain in the Standard & Poor’s 500 Index since 2009, as financial shares slumped and the German government damped optimism of a quick fix to Europe’s debt crisis.
Dow 11,397.00 -247.49 -2.13%, Nasdaq 2,614.92 -52.93 -1.98%, S&P 500 1,200.86 -23.72 -1.94%
Banks in the S&P 500 tumbled 6.3 percent as a group. Wells Fargo dropped 8.4 percent to $24.42. Investors shrugged off the record profit posted by Wells Fargo today and focused on a 6 percent decline in revenue to $19.6 billion. That missed the $20.2 billion estimate of analysts as low interest rates cut into profit on loans.
Citigroup retreated 1.7 percent to $27.93, even as its quarterly profit beat analysts’ estimates, helped by an accounting gain and a reduction in losses tied to soured loans. Excluding the accounting adjustment, revenue fell 8 percent.
Alcoa, the largest U.S. aluminum producer, slumped 6.6 percent to $9.58. The shares had the biggest decline in the Dow. Caterpillar retreated 3.1 percent to $81.52.
Gannett slumped 8.7 percent to $9.99. The owner of 82 newspapers and 23 television stations reported third-quarter profit decreased 1.6 percent as publishing revenue, including advertising and circulation, declined 5.3 percent.
Halliburton Co., the world’s second-largest oilfield services provider, fell 7.9 percent to $34.48 on concern for oil-price volatility and the slower than expected growth in its international business.
El Paso Corp. surged 25 percent, the most since 2002, to $24.45, as Kinder Morgan Inc. agreed to buy the company for $21.1 billion. The cash and stock offer is valued at $26.87 per El Paso share, or 37 percent more than the Oct. 14 closing price, Houston-based Kinder Morgan said in a statement yesterday.