Stocks: Monday's review
Japanese stocks fell for a third day as Goldman Sachs Group Inc. lowered its rating on the country’s equities and on concern Greece may have to restructure its debt, hampering the global economic recovery.
The Topix has tumbled 11 percent since March 10, the day before a magnitude-9 earthquake and tsunami devastated Japan’s northeast coast, disabled a nuclear power plant and disrupted supply chains at companies.
Of the 1,500 companies in the Topix index that have reported earnings results since April 1, 232 have exceeded analysts’ estimates, while 266 have missed them, according to data compiled by Bloomberg.
Toyota Motor Corp. (7203), the world’s No. 1 carmaker, slid 1.8 percent.
Mitsubishi UFJ Financial Group Inc. (8306) lost 1.6 percent, leading the nation’s lenders down after Standard & Poor’s Ratings Services cut credit ratings for Tokyo Electric Power Co., the owner of a damaged power plant.
Ricoh Co., an office equipment maker that gets almost a quarter of its sales from Europe, declined 1.1 percent after the euro weakened.
Credit Saison Co., a consumer lender, sank 6 percent after saying profit fell short of its outlook due to a quake-related charge.
Promise Co., Japan’s No. 2 consumer lender by market value, plunged 11 percent to 639 yen after swinging to a net loss of 96 billion yen from a year-earlier profit, with falling revenue and more reserves needed to repay overcharged interest.
Most European stocks fell, dragging the Stoxx Europe 600 Index lower for a third day, as officials met in Brussels to discuss increasing Greece’s bailout.
Greece’s ASE Index sank to a 14-year low as National Bank of Greece SA (ETE) declined.
Unione di Banca Italiane SCPA, Italy’s fourth-biggest bank, retreated 1.8 percent as net income missed estimates.
Securitas AB (SECUB) slid 4.1 percent as the world’s largest guarding company offered to buy Niscayah Group AB. (NISCB)
BHP Billiton Ltd. (BHP) led mining companies higher as copper gained in London.
Greece began negotiating for a boost in its 110 billion- euro bailout from European governments and the International Monetary Fund today in talks clouded by the arrest of IMF Managing Director Dominique Strauss-Kahn.
Strauss-Kahn has been charged with attempted rape and a criminal sex act on a 32-year-old female maid in a New York hotel, police said. He denies the charges.
Also on the meeting agenda, which started at 3 p.m. in Brussels, is the approval of 78 billion euros in aid for Portugal and the nomination of Bank of Italy Governor Mario Draghi to be the next president of the European Central Bank.
European Union finance ministers are set to approve the bailout for Portugal, the nation’s finance minister Fernando Teixeira dos Santos told reporters before the talks began.
U.S. stocks ended a choppy session lower Monday as investors remain focused on oil prices and the debt crisis in Europe.
Stocks opened lower following a dour manufacturing report and weaker-than-expected earnings from home improvement retailer Lowe's (LOW, Fortune 500). After posting gains in the morning, stocks fell anew in the afternoon.
Economy: The Empire Manufacturing survey came out before the start of trading. The regional reading for general business conditions for manufacturing slipped to 11.9, much lower than the reading of 18 than the consensus estimate of economists from Briefing.com. The index was 21.7 in April.
The National Association of Homebuilders said its May index of builder confidence was unchanged from the previous month at 16, as expected.
Companies: A number of major retailers report earnings results this week.
Shares of home improvement chain Lowe's (LOW, Fortune 500) fell 3%, after the company reported earnings that fell short of forecasts and reigned in its forecast.
Department store J.C. Penney (JCP, Fortune 500) reported a profit of 28 cents per share, topping expectations by 4 cents. Shares slipped 2%.
Also, the NASDAQ OMX Group, Inc. (NDAQ) and IntercontinentalExchange (ICE) said they are withdrawing their bid to acquire NYSE Euronext (NYX, Fortune 500), following discussions with the antitrust division of the U.S. Department of Justice