BLBG:Stocks Retreat on Earnings as Oil, Copper Decline
Stocks fell in Europe and Asia as earnings from BASF SE, Orange SA and Michelin & Cie. dropped and investors weighed prospects for Federal Reserve stimulus. Commodities declined for a second day as oil extended its biggest retreat in more than a month.
The MSCI All-Country World Index lost 0.4 percent to 374.17 at 7:45 a.m. in New York. Standard & Poor’s 500 Index futures slipped 0.4 percent. Crude in New York fell 0.4 percent and copper dropped 1.3 percent. New Zealand’s dollar strengthened at least 0.8 percent against all 16 of its major counterparts. The pound was little changed, erasing an earlier advance, as Britain’s second-quarter growth matched economist estimates.
BASF, the world’s biggest chemical maker, reported profit that missed analyst estimates and said meeting its targets looked difficult, while Orange, France’s former phone monopoly, posted an 8.5 percent drop in earnings. Newmont Mining Corp. and Amazon.com Inc. are among companies set to report earnings today. U.S. durable goods orders probably increased for a third month in June, economists said before Commerce Department data.
“We had some bad outlooks from companies causing the market to trade lower,” Christian Schmidt, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, said by telephone. “Companies have to bring out further improvements and economic data needs to show further improvements to underline the prices we have now.”
Michelin Slides
The Stoxx Europe 600 Index slipped 0.7 percent. BASF lost 4.4 percent and Orange slid 5 percent. Michelin, Europe’s largest tiremaker, sank 2.9 percent after reporting a 13 percent decline in first-half profit. Roche Holding AG advanced 0.5 percent as the maker of cancer drugs reported earnings that exceeded estimates.
The volume of shares changing hands in Stoxx 600 companies was 19 percent less than the 30-day average, according to data compiled by Bloomberg.
The decline in S&P 500 futures indicated the U.S. gauge will fall for a third day.
Facebook Inc. (FB) surged 19 percent in pre-market trading as the operator of the world’s most popular social-networking service reported sales and profit that exceeded estimates.
General Motors Co. gained 1.8 percent after second-quarter profit beat analysts’ estimates. Of the 209 companies in the S&P 500 that have posted quarterly results so far, 75 percent have exceeded analysts’ profit estimates and 56 percent have topped sales projections, data compiled by Bloomberg show.
The Commerce Department report scheduled for release at 8:30 a.m. New York time may show durable-goods orders gained 1.4 percent in June, according to the median estimate in a Bloomberg survey.
Turkey Probe
“Everyone’s focused on the data,” said Koji Iwata, a vice president of foreign-exchange trading at Mizuho Corporate Bank Ltd. in New York. Fed Chairman Ben S. Bernanke has said “the economy would determine the timing of any changes in policy. From a policy perspective, the Fed is the closest major central bank to tightening.”
The MSCI Emerging Markets Index fell for a second day slipping 0.6 percent. The Shanghai Composite Index lost 0.6 percent, Russia’s Micex Index slid 0.4 percent and India’s Sensex declined 1.4 percent.
Turkish stocks dropped for a sixth day, the longest losing streak in seven weeks, retreating 1.6 percent. Tupras Turkiye Petrol Rafinerileri AS slumped to the lowest level in more than nine months after tax authorities started an investigation into Turkey’s sole oil refiner.
Kiwi Climbs
New Zealand’s dollar strengthened after Reserve Bank Governor Graeme Wheeler said a removal of monetary easing “will likely be needed in the future.” The kiwi gained 1.4 percent to 80.39 U.S. cents. It touched NZ$1.1401 per Aussie dollar, the strongest level in more than 4 1/2 years.
The pound slipped 0.2 percent to $1.5291 after rising as much as 0.5 percent as a report showed Britain’s economy grew 0.6 percent in the second quarter.
The euro slipped less than 0.1 percent to $1.3195 and the yen strengthened 0.6 percent to 99.71 per dollar. German bund yields rose three basis points to 1.67 percent.
Data showed German business confidence rose for a third month in July. The Ifo institute’s business climate index, based on a survey of 7,000 executives, increased to 106.2 from 105.9 in June. Economists predicted an increase to 106.1, according to the median of 45 forecasts in a Bloomberg News survey.
The cost of insuring against losses on corporate bonds rose, with the Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies increasing 1.3 basis points to 101.4 basis points, the highest since July 18.
The average yield investors demand to hold speculative-grade corporate bonds in euros fell to 4.75 percent yesterday, the lowest since June 4. The rate for investment-grade securities rose 5 basis points to 2.03 percent, the highest since July 5, Bloomberg index data show.
The S&P GSCI (SPGSCI) gauge of 24 commodities slipped 0.4 percent. West Texas Intermediate oil dropped to $104.93 a barrel after falling 1.7 percent yesterday, the most since June 20, as U.S. crude output surged to a 22-year high. Copper retreated for the first time in six days and nickel lost 1.4 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
