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Asian stocks fell, paring yesterday’s advance, after Italian borrowing costs surged, reviving concern Europe’s sovereign-debt crisis is spreading, damping the outlook for earnings. Stocks also fell after German Finance Minister Wolfgang Schaeuble said Europe’s permanent bailout fund may not be implemented before 2013. German Chancellor Angela Merkel’s Christian Democratic Union party voted to offer euro states a “voluntary” means of exiting the currency bloc.
Japan’s Nikkei 225 (NKY) Stock Average fell 0.7 percent as turnover on the Tokyo bourse’s first section fell to the lowest this year. Hong Kong’s Hang Seng Index declined 0.8 percent. Australia’s S&P/ASX 200 dropped 0.4 percent.
Asian banks and exporters fell, with Standard Chartered, the U.K.’s No 2 lender by market value, sliding 4.1 percent to HK$168 in Hong Kong. HSBC Holdings Plc, Europe’s biggest lender, lost 1.9 percent to HK$62.05.
Nintendo Co., a maker of video-game consoles that gets more than 40 percent of its sales in Europe, fell 2.5 percent to 12,070 yen. Hyundai Motor Co., South Korea’s biggest carmaker by market value, lost 0.7 percent to 230,000 won. Esprit Holdings Ltd., a clothier that counts Europe as its biggest market, fell 2.9 percent to HK$10.04.
Elpida Memory Inc. slumped 9.1 percent on speculation the chipmaker will be removed from the MSCI Asia Pacific Index after a membership review.
China’s developers fell in Hong Kong with Evergrande Real Estate Group Ltd. sliding 6 percent to HK$3.15 after the firm’s chairman told Radio Television Hong Kong the company has no plans to acquire land for residential or commercial use for the remainder of the year as the outlook for home prices in China is “difficult.” China Overseas Land & Investment Ltd. lost 1.3 percent to HK$13.94.
China Railway Group Ltd. dropped 3.2 percent to HK$2.70 after the official People’s Daily reported that portions of a 2.3 billion yuan ($362 million) construction project were illegally subcontracted to unqualified builders, including a former cook.
Among stocks that rose, Paladin Energy gained 3.1 percent to A$1.66 after Prime Minister Julia Gillard said she would seek to overturn a ban on uranium shipments to India in a bid to strengthen ties and boost Australia’s resource-driven economy. Gillard will call for the policy shift at her Labor Party’s national conference next month and said exports to Asia’s third- largest economy would boost jobs.
Sumitomo Mitsui Financial Group Inc., Japan’s second- biggest lender, led Japan’s banks higher after it raised its full-year net-income forecast to 500 billion yen ($6.5 billion) from 400 billion yen as lower bad-loan costs outweigh a drop in lending income, it said in a statement. The bank gained 1.4 percent to 2,094 yen.
European stocks declined as Italy’s premier in waiting Mario Monti struggled to get political parties to help form his new Cabinet and the country’s biggest defense company forecast an unexpected loss. Monti, a former European Union competition commissioner, struggled to get political parties to agree to participate in his so-called technical Cabinet during talks in Rome yesterday and today. A government lacking political representation will find it harder to muster support from the parties in parliament to pass unpopular laws.
The euro area’s inability to contain its sovereign-debt crisis has led to a surge in Italian borrowing costs with yields on the country’s benchmark 10-year bonds climbing above 7 percent today. Monti will try to reassure investors that Italy can cut its 1.9 trillion-euro debt and spur economic growth that has lagged behind the euro-region average for more than a decade.
A report today showed German investor confidence fell to a three-year low in November. The ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations, which aims to predict developments six months in advance, declined to minus 55.2 from minus 48.3 in October. That’s the lowest since October 2008.
A separate report showed the euro area’s economic expansion failed to accelerate in the third quarter. Gross domestic product increased 0.2 percent from the previous three months, when it rose at the same pace, the European Union’s statistics office in Luxembourg said.
European stocks pared their losses after a U.S. Commerce Department report showed that retail sales climbed more in October than predicted as Americans bought iPhones and cars. A separate report showed manufacturing in the New York region unexpectedly expanded in November. The Federal Reserve Bank of New York’s general economic index rose to 0.6 from minus 8.5 in October.
National benchmark indexes fell in 14 of the 18 western- European markets today. France’s CAC 40 Index lost 1.9 percent, the U.K.’s FTSE 100 Index slipped less than 0.1 percent and Germany’s DAX Index dropped 0.9 percent.
Finmeccanica slumped 20 percent to 3.57 euros, its lowest price in 15 years. The company forecast an adjusted loss before interest, taxes, amortization and restructuring of 200 million euros. The maker of helicopters and plane parts booked writedowns of 753 million euros.
Europe’s banking shares slid 2 percent as a group, extending yesterday’s drop. National Bank of Greece SA retreated 12 percent to 1.86 euros and Alpha Bank SA plummeted 11 percent to 96 euro cents. UniCredit, Italy’s biggest bank, lost 4.5 percent to 73.95 euro cents.
Vienna Insurance Group AG sank 4.5 percent to 26.74 euros. The insurer said third-quarter net income rose 3.9 percent to 98.2 million euros. That missed the average estimate of 102.8 million euros in a Bloomberg survey of six analysts. The insurer wrote down its Italian government bonds by 10 percent.
Cable & Wireless Worldwide plunged 26 percent to 22.31 pence, its largest drop since March 2010 and the biggest retreat on the Stoxx 600. The company, which provides telecommunications services to the U.K. police force, will pay an interim dividend of 0.75 pence per share in January 2012 and then suspend future dividend payments to “improve balance-sheet strength and to enable investment in the business,” it said.
Electrolux AB lost 6.3 percent to 113.40 kronor as the world’s second-biggest appliance maker said it will close factories in Europe and North America to cut costs amid weak demand.
Kabel Deutschland AG slipped 3.2 percent to 40.79 euros as Germany’s largest cable operator predicted sales growth in 2011 at the lower end of its forecast range of 6.25 percent to 6.75 percent.
U.S. stocks rose, rebounding from earlier losses, on speculation Italian Prime Minister designate Mario Monti will succeed in forming a new government to battle the debt crisis and after growth in retail sales beat estimates.
Equities recovered as Monti, an economist and former adviser to Goldman Sachs Group Inc., said he’s “convinced” that the country can overcome the current crisis as he prepares to meet with President Giorgio Napolitano tomorrow to present his new government. Stocks had fallen earlier after borrowing costs rose at an auction of Spanish debt. Italian 10-year yields topped 7 percent and rates on French, Belgian, Spanish and Austrian debt rose to euro-era records above German bunds.
Benchmark gauges also rose after the Commerce Department reported a 0.5 percent gain in retail sales, compared with the median economist forecast that called for 0.3 percent growth. The Federal Reserve Bank of New York’s general economic index showed growth for the first time since May.
Dow 12,096.16 +17.18 +0.14%, Nasdaq 2,686.20 +28.98 +1.09%, S&P 500 1,257.80 +6.02 +0.48%
Intel Corp. spurred a rally in semiconductor companies, climbing 2.9 percent, after Warren Buffett’s Berkshire Hathaway Inc. said it invested in the world’s largest chipmaker. Technology shares in the S&P 500 rose 1.3 percent. Intel gained 2.9 percent to $25.34. Apple Inc., the world’s biggest technology company by market value, added 2.5 percent to $388.83.
Computer and software makers may extend gains after a gauge of the industry surged to the highest ratio versus the S&P 500 in more than nine years, according to Brown Brothers
Wal-Mart lost 2.4 percent to $57.46. It didn’t pass higher prices charged by suppliers along to customers struggling with persistent unemployment, Bill Simon, Wal-Mart’s U.S. chief, said. That hurt gross profit margin, or the percentage of net sales left after subtracting the cost of goods sold, which shrank to 24.6 percent, narrower than the 24.8 percent estimate of Colin McGranahan at Sanford C. Bernstein & Co.
Energy shares had the only decline in the S&P 500 among 10 industries, falling 0.2 percent. Chevron Corp. slumped 2.7 percent, the most in the Dow, to $103.27. The company said it appears to have halted a leak at the Frade project offshore Brazil after plugging a well. It said it has seen a significant decrease in the amount of oil seeping from the development.
LinkedIn Corp. slumped 4.6 percent to $74.86 after saying shareholder Bain Capital Ventures will sell all of its 3.71 million shares of the professional-networking website in a secondary stock offering.
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