BLBG: Commodities, Metal Producers Fall as Alcoa Sales Miss Forecasts
April 13 (Bloomberg) -- Shares of raw-materials producers fell along with commodities, with oil declining for a fifth day, as Alcoa Inc. reported sales that disappointed investors and China damped speculation of an imminent revaluation of the yuan.
Raw-materials producers in the MSCI World Index of 23 developed nations’ stocks fell 0.6 percent as a group at 8:48 a.m. in New York. Futures on the Standard & Poor’s 500 Index lost 0.1 percent and Alcoa slid 1.2 percent. Aluminum dropped for the first time in four days. An auction of Greek Treasury bills drew more demand than at a previous sale in the government’s first offering since winning an aid package from the European Union.
Alcoa, the largest U.S. aluminum maker, reported first- quarter sales that missed analysts’ estimates as the U.S. earnings season began after a 7.3 percent rally in the S&P 500 this year. Chinese leader Hu Jintao met with U.S. President Barack Obama and rebuffed calls to strengthen a yuan that American lawmakers say is hindering an economic recovery.
“Valuations are looking a bit stretched,” said Chris Hall, who helps manage about $3.7 billion at Argo Investments in Adelaide, Australia. “No one’s disputing there’s going to be a recovery, but it’s the question of magnitude that’s got people a little bit cautious. Investors are waiting for evidence earnings are sustainable beyond the benefits of stimulus measures.”
The decline in U.S. futures indicated the Dow Jones Industrial Average may retreat after closing yesterday above 11,000 for the first time since September 2008. Combined profit for S&P 500 companies will increase 30 percent in the first quarter from a year earlier, the first back-to-back quarterly profit gains among U.S. companies since 2007, according to analyst estimates compiled by Bloomberg.
Past Rally
The S&P 500 jumped 77 percent from a 12-year low in March 2009 as the economy returned to growth and the Federal Reserve kept its benchmark interest rate near zero to safeguard the recovery. As a result the benchmark’s valuation is about 19 times reported earnings, the highest level so far this year.
Intel Corp. reports results after the close today, followed this week by JPMorgan Chase & Co., Bank of America Corp. and General Electric Co.
The trade deficit in the U.S. widened in February more than anticipated as imports climbed, adding to evidence of a rebound in economic growth. The gap increased 7.4 percent to $39.7 billion from a revised $37 billion the prior month, the Commerce Department said. Imports climbed 1.7 percent as Americans bought more computers and televisions made abroad, while exports rose to the highest level since October 2008.
Resources Drop
The MSCI Asia Pacific Index fell 0.5 percent. Alumina Ltd., Alcoa’s venture partner, slumped 5.6 percent in Sydney. Powerchip Semiconductor Corp. slumped 6.9 percent in Taipei on share-sale plans. China Southern Airlines Co. sank 3.2 percent on concern the nation may delay an immediate appreciation of its currency.
The Stoxx Europe 600 Index was little changed. Antofagasta Plc, which will mine about a 10th of Chile’s copper this year, fell 2.1 percent in London. Heineken NV slid 2.4 percent in Amsterdam after JPMorgan Chase & Co. recommended selling the shares. LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, surged 3.1 percent in Paris after reporting first-quarter sales that beat analysts’ estimates.
Greece sold 26- and 52-week bills today in its first debt auction since the country got a 45 billion-euro loan pledge from the euro-region finance ministers and the International Monetary Fund to help it tackle a budget deficit that is more than four times the European Union limit.
LME Metals
Aluminum for delivery in three months fell 0.6 percent to $2,402 a metric ton on the London Metal Exchange. Copper, nickel and zinc also retreated. Gold for immediate delivery declined for a second day, dropping 0.2 percent to $1,153.95 an ounce.
Oil fell for a fifth day, its longest losing streak since Jan. 15, amid forecasts of an 11th consecutive weekly gain in U.S. crude supplies and as the International Energy Agency boosted its forecast for non-OPEC supply. Crude oil for May delivery dropped 62 cents to $83.72 a barrel in electronic trading on the New York Mercantile Exchange.
The MSCI Emerging Markets Index dropped for a second day, falling 0.6 percent as shares of oil producers including Russia’s OAO Lukoil and China’s Cnooc Ltd. retreated. The South Korean won weakened 0.5 percent against the dollar on speculation the central bank sold the currency to boost export earnings.
Yuan forwards fell the most in three weeks after Hu told Obama that China won’t yield to outside pressure on the exchange rate and any changes will be “based on its own economic and social-development needs,” the official Xinhua News Agency reported.
The euro was little changed near its highest level in more than three weeks against the dollar while the yen advanced against all of its 16 most-traded peers.
