U.S. Futures European Stocks Fall; WalMart Unilever Decline
U.S. Futures, European Stocks Fall; Wal-Mart, Unilever Decline
By Andreas Hippin
Feb. 7 (Bloomberg) — U.S. stock-index futures and European
shares fell after Wal-Mart Stores Inc. reported January sales that
trailed analysts; estimates and Cisco Systems Inc. and Unilever
said demand is slowing, increasing concern economies are cooling.
Wal-Mart, the world;s largest retailer, and Cisco, the
biggest maker of computer-networking equipment, slumped in New
York, while Unilever dropped in London. Daimler AG and Renault SA
led a retreat by automakers, Europe;s worst-performing stocks
this year. Softbank Corp.;s rally lifted shares in Japan.
“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.;;
Futures on the Standard %26amp; Poor;s 500 Index slipped 1 percent
as of 1:46 p.m. in London. The Dow Jones Stoxx 600 Index lost 2.2
percent, extending its decline this year to 14 percent. The MSCI
World Index of 23 developed markets has dropped 11 percent. The
Nikkei 225 Stock Average gained 0.8 percent in Tokyo today.
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.
In the U.K., policy makers cut their benchmark rate by a
quarter point to 5.25 percent today, as expected by all but two of
61 economists surveyed by Bloomberg News. ECB President Jean-
Claude Trichet said risks to price stability “are on the upside;;
after the bank kept its key rate at 4 percent.
European Markets
National benchmarks decreased in all 18 western European
markets. France;s CAC 40 retreated 2.3 percent. The U.K.;s FTSE
100 retreated 2.4 percent, as did Germany;s DAX.
The Stoxx 50 dropped 2.2 percent, and the Euro Stoxx 50, a
measure for the nations sharing the euro, sank 2.1 percent.
Wal-Mart lost $1.59 to $47.24 in New York. January sales
rose less than analysts estimated as gift-card sales lagged
behind the company;s expectations and winter storms damped
demand. The retailer maintained its earnings forecast for the
fourth quarter.
Cisco Systems sank $2.19 to $20.89 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 1.9 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.;;
ASML, Unilever
ASML Holding NV, Europe;s largest maker of chip equipment,
sank 5.3 percent to 16.68 euros. Nokia Oyj, the world;s biggest
producer of mobile-phone handsets, dropped 2.1 percent to 23.65
euros.
Unilever dropped 3.3 percent to 1,601 pence. The world;s
second-largest maker of consumer products reported a 64 percent
drop in fourth-quarter earnings because of costs to reduce jobs.
Chief Executive Officer Patrick Cescau said the U.S. market
is “softening;; and European growth will “moderate;; in the
current quarter.
Infineon Technologies AG, Europe;s second-biggest
semiconductor maker, tumbled 17 percent to 5.59 euros, the
biggest loss in the Stoxx 600 today, 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.
Glaxo, Renault
GlaxoSmithKline Plc dropped 7.4 percent to 1,0981 pence.
Europe;s largest drugmaker said fourth-quarter profit fell to
1.06 billion pounds ($2.1 billion), missing the 1.13 billion-
pound median estimate in a Bloomberg survey of 11 analysts.
Renault decreased 5.9 percent to 67.23 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 2.7 percent to 50.02 euros. Porsche SE, the
maker of the Cayenne sport-utility vehicle, retreated 5.2 percent
to 1,081.61 euros.
The Stoxx Automobiles %26amp; Parts Index has lost 7.9 percent so
far this week, the worst performance among the 18 industry groups
in the Stoxx 600. The index has tumbled 21 percent this year.
“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, Givaudan
Unibail-Rodamco SA sank 2.9 percent to 156.26 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 SA dropped 6.1 percent to 979 Swiss francs.
Goldman, Sachs %26amp; Co. downgraded the world;s biggest flavors and
fragrances maker to “sell;; from “neutral.;;
Yell Group Plc plunged 16 percent to 277 pence. 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.;;
BT Group Plc, the U.K.;s largest phone company, lost 7.8
percent to 242.25 pence after reporting the slowest sales growth
since the end of 2004.
To contact the reporter on this story:
Andreas Hippin in Frankfurt at
