Stocks: Tuesday's review
Most Japanese stocks fell, sending the Topix index to the lowest level since April 19, as Greece seeking more bailout funds and slower-than-estimated manufacturing growth in the New York region fueled concerns about the global economic recovery.
Toyota Motor Corp. (7203), the world’s No. 1 carmaker, slid 1.1 percent.
Tokyo Electric Power Co., operator of the nuclear plant crippled by the March 11 earthquake and tsunami, plunged 9.5 percent after Moody’s Japan K.K. downgraded ratings on the company’s debt.
Sumitomo Mitsui Financial Group Inc. (8316) and other banks fell after the finance minister said creditors need to help support Tepco while it brings the power station under control.
Sapporo Holdings Ltd. (2501), Japan’s fourth-largest brewer, slid 3.3 percent to 297 yen and Mitsui Mining & Smelting Co. retreated 3.6 percent to 270 yen after MSCI Inc. said on its website they were among 20 companies that will be removed from the benchmark MSCI Japan Index. The changes will be effective as of the close trading on May 31.
Electronics makers were the biggest contributor to support the Topix.
Sony, which gets about 70 percent of its revenue overseas, gained 1.5 percent to 2,275 yen. Canon Inc. (7751), the world’s biggest camera maker, increased 0.3 percent to 3,725 yen, erasing earlier losses.
European equity markets endured a volatile session as investors awaited developments from a meeting of eurozone finance ministers on how to handle the debt crisis and the fiscal woes of the bloc’s peripheral nations.
ThyssenKrupp, Germany’s biggest steelmaker, by sales, fell 3.8 per cent to €32.23 after Salzgitter, the number two, said it was not interested in buying the stainless steel division of its rival.
Banks came under further pressure but National Bank of Greece was the top gainer after its chief executive said the capital adequacy of Greek lenders was in good shape despite the debt crisis. NBG shares gained 4.3 per cent to €4.88.
Technology shares fell after Hewlett-Packard, the US computer maker, slashed its profit outlook. France’s Alcatel-Lucent fell 4.3 per cent to €4.05, while German chipmaker Infineon lost 3.9 per cent to €7.87.
Bouygues, the French telecoms and construction group, lost 4.5 per cent to €32.44 after disappointing first-quarter earnings.
Stocks fell Tuesday as investors digested a weak outlook from Hewlett-Packard, a grim read on the housing market and an unexpected drop in April industrial production. Despite those negative factors, stocks came well off session lows in late afternoon trading.
The blue chips were dragged lower by an 7% drop in shares of Hewlett-Packard (HPQ, Fortune 500). The PC maker reported a 3% increase in sales but warned the current quarter will be hurt by the Japanese quake impact and weak PC sales.
Chipmakers took a hit, with Intel (INTC, Fortune 500) shares falling 0.5% as Nvidia (NVDA) and AMD (AMD, Fortune 500) shares sliding 1%.
Economy: On Tuesday, the Commerce Department said housing starts plunged a worse-than-expected 10.6% in April, while the Federal Reserve said industrial production was flat in April due in part to the Japanese earthquake. Economists were looking for a gain in the industrial production figures.
Companies: Shares of raw materials and construction companies were also dragged lower, with Caterpillar (CAT, Fortune 500), Cummins (CMI, Fortune 500) and Alcoa (AA, Fortune 500) were down more than 2%. Commodities also retreated, with oil and silver futures down more than 1%.