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Asian stocks swung between gains and losses as investors await the results of a European summit tomorrow where leaders are expected to hammer out details on enhancing the region’s bailout fund. German Chancellor Angela Merkel and fellow European leaders will meet in Brussels tomorrow for a second summit in four days to find ways to enhance the firepower of a regional rescue fund. European leaders are still negotiating with banks over the size of losses they take on Greek bonds while deliberating over whether the region’s rescue fund will guarantee losses for banks that lend to debt-stricken countries in the region.
Japan’s Nikkei 225 Stock Average fell 0.9 percent today, while South Korea’s Kospi Index lost 0.5 percent. Australia’s S&P/ASX 200 slipped 0.6 percent. Hong Kong’s Hang Seng Index rose 1.1 percent after a late surge.
Asian exporters to Europe fell. Esprit Holdings lost 3.2 percent to HK$10.42. Canon Inc., second only to Nippon Sheet Glass Co. on the benchmark Nikkei 225 Stock Average in percentage of revenue generated in Europe, slid 1.8 percent to 3,490 yen. Mazda Motor Corp., the Japanese carmaker that gets 18 percent of sales from Europe, declined 3.1 percent to 157 yen.
NGK Insulators plunged in Tokyo trading after the Nikkei newspaper reported the company asked customers not to use some of its batteries following a fire at a Mitsubishi Materials plant. The stock slid 17 percent to 926 yen after slumping as much as 27 percent, the biggest drop since at least 1974.
Makers of building equipment rose today after Caterpillar topped earnings estimates. Komatsu rose 3.1 percent to 1,833 yen, while Hitachi Construction Machinery Co. gained 2.7 percent 1,433 yen. Kubota Corp. increased 1.6 percent to 635 yen.
Energy firms advanced after crude oil prices increased. Cnooc rose 5.4 percent to HK$14.42 in Hong Kong. Inpex Corp., Japan’s biggest energy explorer, climbed 1.9 percent to 528,000 yen in Tokyo.
European stocks slid from an 11-week high as canceled finance ministers’ meeting fueled concern that the region’s leaders may struggle to resolve the debt crisis at a summit tomorrow. Chancellor Angela Merkel and fellow leaders return to Brussels tomorrow for a second summit in four days to discuss Europe’s bailout fund. Policy makers are jousting with banks over the size of losses they take on Greek bonds while deliberating over leveraging the fund after ruling out tapping the European Central Bank’s balance sheet. Stocks extended losses after the U.K. government said a meeting of EU finance ministers scheduled for tomorrow to decide on bank recapitalization was canceled. They pared some of their decline as it was confirmed that summits of the 27 EU leaders and 17 euro-area heads of government will take place in Brussels as planned. The gathering of finance ministers was canceled because the bank-recapitalization issue cannot be decided before other elements of the rescue package, a person familiar with the matter said on condition of anonymity.
National benchmark indexes fell in 15 of the 18 western European markets today. The U.K.’s FTSE 100 declined 0.4 percent and France’s CAC 40 retreated 1.4 percent. Germany’s DAX Index slipped 0.1 percent.
STMicroelectronics tumbled 7.4 percent to 5.06 euros in Milan after saying net revenue will range from $2.15 billion to $2.3 billion. That compared with an average analyst estimate of $2.52 billion, according to Bloomberg data. Forecasts for gross margin, the percentage of sales remaining after costs of production, were also below projections.
Meyer Burger lost 13 percent to 20.55 Swiss francs as Europe’s biggest solar-panel equipment maker said it will temporarily halt output at its MB Wafertec unit in Switzerland amid “high uncertainties” in the solar industry.
Reckitt Benckiser Group Plc retreated 3.4 percent to 3,330 pence, the biggest drop in a month. The maker of Lysol cleaners forecast lower sales and profit at its pharmaceutical division in the fourth quarter because of U.S. health-care reforms and a price increase for Suboxone tablets.
Novartis AG, Europe’s second-biggest pharmaceutical company, lost 3.3 percent to 50.10 francs after saying it plans to eliminate 2,000 jobs in Switzerland and the U.S. and add employees in China and India to offset the effect of drug-price reductions.
BP, the operator of the Macondo well in the Gulf of Mexico that caused the worst accidental U.S. oil spill last year, climbed 4.4 percent to 457.2 pence as profit beat analysts’ estimates. Earnings adjusted for one-time items and changes in inventory were $5.3 billion, down from $5.5 billion a year earlier. The average estimate of 12 analysts surveyed by Bloomberg was for income of $5 billion on that basis.
BG Group rose 3.8 percent to 1,378 pence. The U.K.’s third- largest natural-gas producer said third-quarter earnings rose 25 percent as energy-price gains countered output constraints.
Neste Oil Oyj surged 13 percent to 9.06 euros, the biggest gain since 2008. Finland’s only oil refiner was boosted by the improving outlook for its renewable fuels unit.
Swedbank AB, the largest lender in the Baltic states, rose 3.7 percent to 90.05 kronor as it reported a 34 percent jump in third-quarter profit and said costs will decline in 2012 as it adjusts to the European economic slowdown.
U.S. stocks fell, halting a three- day gain in the Standard & Poor’s 500 Index, after United Parcel Service Inc. sank and economic reports missed estimates as investors awaited tomorrow’s European summit. Stocks extended losses after consumer confidence unexpectedly slumped in October to the lowest level since March 2009, when the U.S. economy was in a recession, as Americans’ outlooks for employment and incomes soured. Separate data showed that home prices in 20 U.S. cities dropped more than forecast in August, highlighting one of the obstacles facing the economic recovery in its third year. European leaders will hold a summit tomorrow as they seek to bolster the region’s rescue fund, recapitalize banks and provide debt relief to Greece. Boosting the effectiveness of the European Financial Stability Facility will require further talks with investors as German lawmakers prepare to vote on its new powers, a European Union document showed.
Dow 11,706.62 -207.00 -1.74%, Nasdaq 2,638.42 -61.02 -2.26%, S&P 500 1,229.05 -25.14 -2.00%
All 10 groups in the S&P 500 retreated as a gauge of conglomerates stocks slid 3.4 percent. Alcoa, Inc. (AA), the largest U.S. aluminum producer, gained 4.2 percent to $10.14.
UPS, the largest package- delivery company and a proxy for the economy, retreated 1.9 percent after international shipping growth began to cool while U.S. expansion stagnated. The company’s total U.S. volume was flat in the third quarter because of “the slow U.S. economy,” Atlanta-based UPS said today in a statement. A 4.6 percent increase in shipments outside the U.S. trailed the 6.2 percent gain in the previous three months.
3M Co. (MMM)lost 6.3 percent to $77.04. Electronics sales are slowing after several quarters of what 3M called “very good growth.” The company, whose stock rallied 14 percent this month before today, is seeing the effect of a slowdown in developed countries earlier than other manufacturers because some of its products, such as components for liquid-crystal-display TVs, are tied to consumer demand.
Netflix plunged 35 percent, the biggest decline since 2004, to $77.37. The company faces rising content costs, a customer revolt over a price increase and startup costs as it expands into Latin America, followed by the U.K. and Ireland in early 2012. Other new markets will have to wait, Chief Executive Officer Reed Hastings said.
Amazon.com tumbled 14 percent to $195.11 at 4:30 p.m. New York time. The world’s largest Internet retailer reported a plunge in third-quarter profit after it ramped up spending on new products such as the Kindle Fire tablet.
AK Steel Holding Corp. declined 14 percent to $7.47. The third-largest U.S. steelmaker by volume reported less revenue than analysts projected and a decline in shipments.
First Solar Inc., the biggest maker of thin-film solar panels, sank 25 percent to $43.27 as Chairman and founder Mike Ahearn was named interim chief executive officer, replacing Rob Gillette. The company didn’t give a reason for Gillette’s departure.
MF Global Holdings Ltd. tumbled 48 percent, the most since 2008, to $1.86. The futures broker that had its credit rating cut yesterday to the lowest investment grade reported its largest-ever quarterly loss.
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