Europe's Dow Jones Stoxx 50 and 600 indexes fell for the first week in the last four as companies such as Volkswagen AG and Schneider Electric SA said the dollar's drop may crimp sales or profit this year.
TUI AG and LVMH Moet Hennessy Louis Vuitton SA slid on concern severe acute respiratory syndrome will deter tourists from booking holidays and buying luxury goods.
The Dow Jones Stoxx 50 Index fell 1.4 percent to 2,289.97, taking its drop to 1.4 percent for the week. It slid Thursday and Friday after reaching a three-month high on Wednesday. The Stoxx 600 lost 1.1 percent for the week.
"We think the current rally is close to petering out," said Andreas Utermann, who helps manage about US$700 billion at Allianz Dresdner Asset Management. He said he may start selling stocks, partly because the US and European economies are "not firing on all cylinders." Both the US and UK economies expanded less than economists expected in the first quarter, reports showed Friday.
The Organization for Economic Cooperation and Development cut its forecast for 2003 global economic growth on Thursday.
Benchmark indexes fell in all of the 16 Western European markets open for trading Friday except Portugal. Greece's stock exchange was closed for a national holiday. All 17 markets were closed Monday for Easter.
Germany's DAX Index has fallen 2.1 percent in the past four sessions. France's CAC 40 Index has slipped 1.1 percent and the UK's FTSE 100 Index has lost 0.5 percent.
Reports from companies such as Volkswagen AG during the week highlighted how the weaker dollar is affecting profit. Volkswagen, Europe's largest carmaker, blamed the dollar on Thursday when it said operating profit will fall for the second straight year this year. The stock lost 10 percent in the past two days.
Schneider Electric, the world's largest maker of circuit breakers, has slipped 4 percent since saying Wednesday that the current exchange rate would make it "extremely difficult" to cut costs enough to meet its 2004 profit target.
The dollar has lost 19 percent against the euro in the past 12 months. Every 10 percent drop in the dollar cuts European company earnings by 4 percent on average, according to research from Goldman, Sachs & Co.
DaimlerChrysler AG, the fifth-largest carmaker, Michelin & Cie, Europe's biggest tiremaker, and other exporters also said the declining dollar is reducing earnings.
Royal Philips Electronics NV, Europe's largest consumer electronics maker, fell 6.1 percent this week. The company reported a 14 percent decline in sales. Sales would have risen 5 percent without currency effects, it said. Philips generates almost one-third of its revenue in the US.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by