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European stocks declined as comments from Federal Reserve policy makers fueled speculation the central bank will begin tapering stimulus next month, and as companies from Salzgitter AG to Lanxess AG cut profit forecasts.
The Stoxx Europe 600 Index lost 0.4 percent to 303.5 at the close of trading. The benchmark gauge erased earlier gains of as much as 0.4 percent as Fed Bank of Atlanta President Dennis Lockhart said in an interview with Market News International that if economic growth and job creation pick up as expected, the central bank should proceed with the “removal” of its asset purchases, and as investors awaited remarks from Fed Bank of Chicago President Charles Evans.
Fed Bank of Dallas President Richard Fisher, one of the most vocal critics of quantitative easing, yesterday warned investors not to rely on stimulus.
National benchmark indexes retreated in 14 of the 18 western-European markets today. The U.K.’s FTSE 100 dropped 0.2 percent, Germany’s DAX fell 1.2 percent and France’s CAC 40 slipped 0.4 percent.
Salzgitter tumbled 12 percent to 25.27 euros, its biggest decline since March 2009. The steelmaker expects a pretax loss of about 400 million euros this year amid a slump in demand due to the deterioration of the European economy. “The ongoing recession in many European countries has put pressure on the European steel industry in the form of a structural crisis,” it said yesterday after the close of regular trading.
Lanxess retreated 4.3 percent to 44.48 euros after it cut its profit forecast for 2014 and predicted no recovery in second-half demand. The Cologne, Germany-based company said it won’t achieve its Ebitda target for next year of 1.4 billion euros. It forecast earnings for this year of 700 million euros to 800 million euros.
Munich Re, the world’s biggest reinsurer, dropped 4.9 percent to 145.25 euros after it said second-quarter profit fell 35 percent, missing analysts’ estimates, as claims arising from natural disasters rose. Net income dropped to 529 million euros from 808 million euros a year earlier, trailing the 557.1 million-euro average estimate of analysts.
InterContinental Hotels rose 6.4 percent to 2,030 pence after the world’s largest provider of hotel rooms reported first-half net income of $340 million, compared with $271 million a year earlier.
UniCredit SpA added 2.2 percent to 4.26 euros. Italy’s biggest bank said second-quarter net income climbed to 361 million euros from 169 million euros a year earlier. That was in line with the 360 million-euro average estimate of eight analysts surveyed by Bloomberg. The Milan-based bank posted a 254 million-euro return from the buyback of 4.2 billion euros of senior securities in April, according to a statement today.
Royal DSM NV gained 6.4 percent to 56.02 euros. The Dutch chemical company posted second-quarter profit that beat analyst estimates after a $3.1 billion-acquisition spree and as it cut costs. Earnings before interest, taxes, depreciation and amortization jumped 19 percent to 345 million euros. That exceeded the 333 million-euro average estimate of 11 analysts.
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