Japan's Nikkei Extends Losing Streak; Drugmakers, Insurers Rise
Japan's shares fell, extending the Nikkei 225 Stock Average's worst
losing streak this year, as a drop in oil and metals drove down trading
companies, offsetting a gain by insurers and drugmakers.
Mitsubishi Corp., which gets more than half its profit from
commodities, led trading houses to the lowest in almost two months.
Nissay Dowa General Insurance Co., Japan's
fifth-largest casualty insurer, and drugmaker Tsumura & Co. surged
as demand increased for stocks more resilient against an economic
slowdown.
Mitsubishi, Japan's biggest trading company, slumped 2.6 percent to 3,420 yen. Itochu Corp.,
which invests in Russia's Sakhalin oil projects, declined 2.5 percent
to 1,141 yen, and Sumitomo Corp. dropped 3 percent to 1,391 yen. A
gauge tracking trading companies fell to the lowest since May 2.
Sumitomo Metal Mining Co., Japan's largest gold producer, sank 2.3 percent to 1,590 yen, and Nippon Mining Holdings Inc., the largest copper producer, lost 2 percent to 655 yen.
Crude oil slid 1.8 percent yesterday, the first decline in four days,
while gold fell to the lowest in two weeks. Copper sank for a
third-straight day.
Nissay Dowa leapt 4.4 percent to 618 yen, while Sony
Financial Holdings Inc. climbed 3.7 percent to 445,000 yen. Tsumura,
which makes traditional herbal medicine, surged 4.8 percent to 2,710
yen, while Chugai Pharmaceutical Co., the Japanese partner of Roche
Holding AG, gained 4.7 percent to 1,750 yen, for the second-biggest
gain on the Nikkei.
Nintendo Co., the maker of Wii game machines, jumped
2.6 percent to 62,900 yen, while Sony Corp., the world's largest game
console maker, added 2.9 percent to 5,060 yen.
``There is a tendency for more people buy games when the economy is
slowing,'' said Etsuko Tamura, a Tokyo-based analyst at Mizuho
Investors Securities Co. ``The game industry is immune to an economic
slump.''
Insurers and drugmakers were the biggest winners on the Topix, while
trading companies contributed the most to the index's decline.
European Stocks Drop; Fortis, Carrefour, Adidas Lead Decline
European stocks fell the most in three months on concern credit losses
will reduce bank earnings, while slowing economic growth curbs profits
for retailers.
Fortis tumbled 19 percent on plans to raise $2.4 billion of equity and cancel a dividend to boost solvency. Carrefour SA
led retailers to their steepest retreat since January after analysts
downgraded the stock and French consumer confidence slumped to a record
low in June. Adidas AG, the world's second-largest sporting-goods maker, dropped as Nike Inc. said orders stagnated in the U.S.
Goldman Sachs Group Inc. predicted that Citigroup Inc., the bank that's
reported the biggest losses from the collapse of the U.S. mortgage
market, may post $8.9 billion more in writedowns in the second quarter
and recommended selling the shares.
European Central Bank President Jean-Claude Trichet reiterated
yesterday policy makers may raise their key rate from a six-year high
next month to curb price increases. The Federal Reserve kept rates
unchanged yesterday, after a series of seven reductions, saying
``upside risks'' to prices have increased.
National indexes declined in all 18 western European markets. The
U.K.'s FTSE 100 slipped 2.6 percent. France's CAC 40 fell 2.4 percent,
as did Germany's DAX.
Fortis dropped 2.39 euros to 10.26. The company will
raise 1.5 billion euros ($2.4 billion) of equity. The measures will
increase solvency by 8 billion euros, the company said.
Earnings for banks in the Stoxx 600 will decline 14 percent this year,
according to analysts' estimates compiled by Bloomberg. That's down
from a 2 percent drop forecast at the end of last year.
UBS AG, the European bank with the biggest losses
from the U.S. subprime mortgage contagion, slipped 4 percent to 22.98
francs. Royal Bank of Scotland Group Plc, which earlier this month
raised 12.3 billion pounds ($24 billion) in a rights offer, retreated
4.9 percent to 218 pence.
Carrefour, the world's second-biggest food retailer,
fell 8.8 percent to 37.88 euros. JPMorgan Chase & Co. cut its
recommendation to ``neutral'' from ``overweight,'' while Merrill Lynch
& Co. lowered its rating to ``neutral'' from ``buy.''
Consumer confidence in France declined this month as the fastest
inflation in 12 years eroded households' purchasing power. A gauge of
Italian business confidence slumped to the lowest in almost three years
this month as orders were curbed by slowing economic growth, rising
energy costs and a stronger euro.
DSG International Plc tumbled 5.6 percent to 42.5
pence. The biggest U.K. consumer-electronics retailer reported its
first annual loss since 1994 after writing down the value of its money-
losing Italian unit.
Adidas, the world's second-largest sporting-goods
maker, declined 4 percent to 41.12 euros. Nike Inc., the world's
biggest athletic-shoe maker, said orders for delivery of goods through
November in the U.S. were unchanged.
British Sky Broadcasting Group Plc retreated 4.9
percent to 470.75 pence, the lowest in almost four years. JPMorgan cut
the stock to ``underweight'' from ``overweight,'' citing risks from a
slowdown in sales and a ``poor'' economic environment.
Inmarsat Plc gained 2.9 percent to 500 pence, the
highest since February, on speculation the U.K. satellite company that
provides communications services may receive a bid.
U.S. stocks tumbled, sending the Dow Jones
Industrial Average to its worst June since the Great Depression, as
record oil prices, credit-market writedowns and a slowing economy
threatened to extend a yearlong profit slump.
General Motors Corp., the largest U.S. automaker,
plunged the most in three years as Goldman Sachs Group Inc. advised
selling the stock and crude rose by $5 a barrel. Citigroup Inc.
led the KBW Bank Index to an almost 10-year low as Goldman said the
lender may report an $8.9 billion second-quarter charge and cut its
dividend. Research In Motion Ltd., maker of the BlackBerry, posted its biggest drop since 2001 on concern competition with Apple Inc.'s iPhone is reducing earnings. All 10 industry groups in the S&P 500 retreated at least 1 percent as Nike Inc. said U.S. earnings dropped and Oracle Corp.
predicted the slowest sales growth since 2006, adding to concern that
consumers and businesses are cutting back as the economy expands at the
weakest pace in five years.
Earnings at companies in the S&P 500 slid 18
percent on average in the first quarter, the third straight retreat,
according to data compiled by Bloomberg. Analysts project profits will
drop 8.9 percent this quarter, according to a Bloomberg survey last
week.
The Dow has slumped 9.4 percent this month, its worst
June since an 18 percent tumble in 1930 during the Great Depression.
All 30 companies have posted losses in the month as oil surged, the
unemployment rate jumped to the highest since 2004 and concern grew
that global financial firms will add to $400 billion of
subprime-related writedowns.