Most Japan Stocks Rise, Led by Trading Companies on Crude Oil
Most Japanese stocks gained, led by commodities-related companies,
after crude oil prices climbed. Steelmaker shares plunged on
speculation costs will rise after a Chinese rival accepted a record
increase in iron prices.
Mitsubishi Corp., which gets more than half its profit
from commodities, led trading companies to their sharpest gain in a
week. Nippon Steel Corp., the world's second-biggest steelmaker, and
JFE Holdings Inc. led makers of the alloy to the lowest in six weeks.
Mitsubishi, Japan's biggest trading company, climbed 2.1 percent to
3,490 yen, while Itochu Corp., which invests in Russia's Sakhalin oil
projects, gained 2.4 percent to 1,177 yen. An index tracking trading
companies contributed the most to the Topix's rise.
Crude rose as high as $137.48 a barrel on signs Saudi Arabia's output
increase may not boost supply enough to make up for production
disruptions in Nigeria.
Bridgestone Corp., the world's largest tiremaker,
sank 2.4 percent to 1,766 yen, the lowest since May 29. Bridgestone
loses almost $250 million in profit for every $10 gain in the price of
oil, a component in synthetic rubber, according to Nikko Citigroup Ltd.
Makers of rubber products were the second-biggest losers among groups on the Topix, following steelmakers.
Nippon Steel sank 2.5 percent to 585 yen, while JFE lost 2.2 percent to 5,390 yen. Smaller rival Mitsubishi Steel Manufacturing Co. dropped 2.6 percent to 528 yen. The Topix Iron & Steel Index closed at lowest since May 13.
Chugai Pharmaceutical Co. dropped 3.8 percent to
1,652 yen. Credit Suisse Group and JPMorgan Chase & Co. both cut
their ratings on the Japanese unit of Roche Holding AG.
Furukawa Electric Co., a maker of wire and metal
products, rose the most since January 2006 after it raised its profit
forecast on a one-time gain from the liquidation of a subsidiary. The
shares jumped 8.9 percent to 512 yen, making Furukawa the biggest
winner on the Nikkei.
European Stocks Retreat on Oil, Economy; Daimler, Kesa Decline
European stocks fell for a fifth day as higher oil prices and
weakening consumer confidence in Germany weighed on carmakers, airlines
and retailers, while a drop in mortgage approvals pushed U.K.
homebuilders lower.
Daimler AG, the world's second-largest maker of luxury
cars, and Ryanair Holdings Plc declined after oil rose for a third day.
Kesa Electricals Plc dropped as the electronics retailer refrained from
announcing a stock buyback as sales stagnate. Taylor Wimpey Plc slumped
as mortgage approvals in the U.K. declined in May to the lowest since
at least 1997.
Stocks extended declines after a U.S. report showed consumer confidence
fell more than forecast this month to the lowest level in more than 16
years.
National benchmark indexes decreased in all 18 western European
markets. France's CAC 40 dropped 0.8 percent, as did Germany's DAX. The
U.K.'s FTSE 100 slipped 0.6 percent.
Consumer confidence in Germany, Europe's largest
economy, dropped to the lowest in more than two years as soaring energy
prices sapped people's purchasing power, according to a separate report
today.
Daimler slid 3.8 percent to 41.86 euros. Fiat SpA, Italy's biggest carmaker, retreated 7.9 percent to 10.66 euros.
Ryanair lost 3 percent to 2.87 euros.
Ciba, the world's largest maker of colors for plastics, fell 6.2
percent to 32 francs. Solvay, the biggest maker of soda ash, dropped 4
percent to 88.22 euros. Citigroup cut its recommendation on both stocks
to ``sell'' from ``hold.''
Kesa sank 9.6 percent to 157.75 pence after saying it
expected ``difficult'' trading conditions ahead. The owner of Darty
electronics stores in France and the U.K. Comet chain refrained from
announcing a stock buyback to conserve money as sales stagnate.
Taylor Wimpey, the U.K.'s largest homebuilder, lost 12 percent to 57.25 pence. Bellway Plc, a U.K. homebuilder aimed at first-time buyers, slipped 5 percent to 467.5 pence.
U.K. mortgage approvals declined to the lowest since at least 1997 in
May as the slumping property market discouraged buyers, a report by the
British Bankers' Association showed.
U.S. stocks retreated to a three- month low after consumer confidence
weakened and United Parcel Service Inc. said rising fuel costs will
reduce profit.
UPS, the biggest package shipment company,
tumbled the most in almost two years after predicting second-quarter
earnings below analyst estimates. Dow Chemical Co.,
the largest U.S. chemical producer, slumped to the lowest since March
as Deutsche Bank AG cut profit estimates. Prospects that the worsening
outlook for the economy may forestall interest-rate increases helped
financial shares rebound from the lowest level since 2003.
UPS lost $4, or 6 percent, to $62.26, an
almost-five-year low. Earnings will be 83 cents to 88 cents a share,
down from the range of 97 cents to $1.04 projected on April 23, the
company said. The average estimate of 16 analysts surveyed by Bloomberg
was 98 cents.
Raw-materials producers fell the most among 10 S&P 500 industries, losing 2.5 percent.
Dow slid $1.04, or 2.8 percent, to $36.58. David
Begleiter, a New York-based analyst at Deutsche Bank, reduced his
second- quarter and full-year earnings estimates for Dow because of
rising costs and ``signs of demand destruction in the U.S.'' Dow said
it will raise prices as much as 25 percent in July, the largest
increase in company history and the second in two months, to recoup
surging energy and raw-material costs.
Freeport-McMoRan Copper & Gold Inc., the world's
second- largest producer of copper, fell as the metal retreated for a
second day on concern slowing global growth will reduce demand.
Freeport-McMoRan lost $2.83 to $115.72.