European Stocks Fall Led by Infineon Japanese Shares Rise
European Stocks Fall, Led by Infineon: Japanese Shares Rise
By Andreas Hippin
Feb. 7 (Bloomberg) — European stocks declined after
Infineon Technologies AG lowered its revenue forecast and Cisco
Systems Inc. said a sales slump may last months, increasing
concern that economies are slowing.
Infineon dropped the most in more than five years. ASML
Holding NV, Europe;s largest maker of chip equipment, and Nokia
Oyj declined to the lowest in more than a week. Cisco, the world;s
biggest maker of computer-networking equipment, slid in Frankfurt.
Daimler AG and Renault SA led a retreat by automakers, the
region;s worst-performing stocks this year.
Japanese stocks rose as Softbank Corp. led a rally by mobile-
phone operators, while U.S. index futures were little changed.
“Equity markets reflect a recession in the U.S.,;; said
Thomas Romig, who helps manage the equivalent of $75 billion in
assets at Cominvest Asset Management in Frankfurt, in a Bloomberg
Television interview. “Interest-rate cuts might not be enough.;;
Europe;s Dow Jones Stoxx 600 Index lost 0.8 percent to
317.67 as of 10:50 a.m. in London as investors awaited rate
decisions by the Bank of England and the European Central Bank.
The European benchmark has lost 13 percent this year, while the
MSCI World Index of 23 developed markets has dropped 11 percent.
Futures on the Standard %26amp; Poor;s 500 Index slipped less than
0.1 percent, while the Nikkei 225 Stock Average gained 0.8 percent
in Tokyo.
U.S. stocks fell yesterday as oil prices slid, Macy;s Inc.
cut its earnings forecast and a Federal Reserve official signaled
that higher inflation may prevent more interest-rate reductions.
Rate Decisions
In the U.K., policy makers will probably lower their
benchmark rate by a quarter point to 5.25 percent today,
according to all but two of 61 economists surveyed by Bloomberg
News. ECB President Jean-Claude Trichet may indicate the region;s
expansion isn;t as strong as anticipated as the bank keeps its
key rate at 4 percent, economists said before the decision.
National benchmarks decreased in all of the 17 western
European markets that were open except Greece and Spain. France;s
CAC 40 retreated 0.7 percent, as did the U.K.;s FTSE 100, while
Germany;s DAX slipped 0.8 percent.
The Stoxx 50 dropped 0.5 percent, and the Euro Stoxx 50, a
measure for the nations sharing the euro, sank 0.6 percent.
Infineon, Europe;s second-biggest semiconductor maker,
tumbled 12 percent to 5.89 euros, the steepest loss since Nov.
11, 2002, after reporting its fourth straight loss and trimming
its sales forecast.
The net loss in the first quarter ended Dec. 31 was 396
million euros ($579 million), compared with a year-earlier profit
of 120 million euros. Infineon said sales will rise by less than
10 percent this year excluding its memory-chip unit Qimonda AG,
versus a December forecast of as much as 10 percent.
ASML, Cisco
ASML Holding sank 2.8 percent to 17.12 euros. Nokia, the
world;s biggest producer of mobile-phone handsets, dropped 2.6
percent to 23.54 euros.
Cisco Systems sank $1.73 to $21.35 in German trading. Chief
Executive Officer John Chambers said late yesterday a sales slump
may last months. Cisco;s forecast helped push Nasdaq-100 futures
down 0.8 percent.
The Nasdaq Composite Index, which gets 42 percent of its
value from technology shares, has lost 14 percent this year,
compared with a 9.7 percent drop for the S%26amp;P 500. Cisco;s
comments followed disappointing forecasts last month from Apple
Inc., the maker of Macintosh computers and iPod media players,
and Intel Corp., the world;s largest chipmaker.
JPMorgan Chase %26amp; Co. lowered its recommendation for Cisco to
“neutral;; from “overweight.;;
Shelving Plans
Renault decreased 4.4 percent to 68.31 euros as Merrill
Lynch %26amp; Co. took France;s second-largest carmaker off its
“Europe 1;; list. Daimler, the world;s second-biggest maker of
luxury cars, lost 1.2 percent to 50.84 euros. Porsche SE, the
maker of the Cayenne sport-utility vehicle, retreated 4 percent
to 1,095.04 euros.
The Stoxx Automobiles %26amp; Parts Index has lost 6.7 percent so
far this week, the worst performance among the 18 industry groups
in the Stoxx 600.
“In such an environment of economic uncertainty, consumers
shelve plans for buying a new car,;; said Peter Braendle, who
helps manage the equivalent of $56 billion at Swisscanto Asset
Management in Zurich. “The U.S. slowdown hit auto stocks. We are
underweight car stocks in our portfolio.;;
Unibail-Rodamco SA sank 2.8 percent to 156.38 euros.
Europe;s largest real estate investment trust said profit fell 55
percent last year as the company wrote down 1.34 billion euros of
goodwill following the acquisition of Rodamco Europe NV.
Givaudan, Yell Group
Givaudan SA dropped 4.6 percent to 994 Swiss francs.
Goldman, Sachs %26amp; Co. downgraded the world;s biggest flavors and
fragrances maker to “sell;; from “neutral.;;
Yell Group Plc plunged 15 percent to 279.25 pence, the
biggest loss in the Stoxx 600 today. The publisher of the U.K.;s
Yellow Pages phone books said nine-month net income dropped to
150.6 million pounds ($295 million) from 159.8 million pounds a
year earlier.
Merrill Lynch lowered its recommendation on the stock to
“neutral;; from “buy.;;
Deutsche Postbank AG, Germany;s biggest consumer bank by
clients, jumped 3.2 percent to 58.80 euros after Deutsche Bank
AG;s Chief Executive Officer Josef Ackermann said he;s interested
in looking at the bank.
To contact the reporter on this story:
Andreas Hippin in Frankfurt at
