European stocks are poised for a second week of declines on concern companies will struggle to lift profit as economic growth stagnates. Nokia Oyj, the world's largest mobile-phone maker, and Bayer AG paced the slide.
Royal Vendex KBB NV, the biggest Dutch department-store owner, slumped 14 percent today after predicting a loss at one of its businesses. MMO2 Plc dropped after Goldman, Sachs & Co lowered its recommendation for the mobile phone company, citing concern about increasing competition in Britain.
The Dow Jones Stoxx 50 Index dropped 9.03, or 0.4 percent, to 2392.25 at 5:58pm in London. It has lost 1.4 percent this week.
The Stoxx 600 fell 0.3 percent to 203.22. It is down 0.8 percent since last Friday, with the telecom group leading declines.
"We are going to have a sticky, difficult summer," said Gary Clarke, who manages US$1.34 billion at Gartmore Investment Management in London. "We will get some poor corporate news over the summer and mixed economic news from the US and Europe."
Orders to German factories, whose production accounts for about a fifth of Europe's largest economy, fell 2.2 percent from April, the Economy and Labor Ministry said today. Economists had forecast orders to be unchanged. The drop was the third in the past four months. An unexpected interest-rate cut in Sweden added to concern about the region's economy.
Eight of the 17 Western European benchmark indexes fell today. Germany's DAX declined 0.4 percent. The UK's FTSE 100 Index lost 0.1 percent. France's CAC 40 Index dropped 0.6 percent.
September futures on the Dow Jones Euro Stoxx 50 Index of companies based in the 12 countries sharing the euro were unchanged at 2413. The index slid 0.6 percent to 2406.95.
Sweden's OMX Index climbed 0.2 percent to 539.05. Sweden's Riksbank cut its benchmark interest rate a quarter point to 2.75 percent. Twelve of 17 economists surveyed by Bloomberg News expected the bank to leave rates unchanged at 3 percent, while five had forecast a quarter-point reduction. The index fell as much as 0.5 percent after the announcement.
Swedish growth will slow to 1.2 percent this year from 1.9 percent in 2002, the Riksbank said last month. In the euro zone, which excludes Sweden, the economy may grow zero to 0.4 percent in the second and third quarters, the European Commission has forecast. It didn't grow at all from January through March.
Reports Tuesday showed that European manufacturing shrank in June, the ninth contraction in 10 months, and retail sales in Germany slid for the third month in four in May.
Nokia fell 2.5 percent to 14.10 euros today, losing 5 percent this week.
Commerzbank Securities cut its recommendation on Nokia to "reduce" from "hold" on Wednesday, citing concern mobile-phone service providers such as Orange SA will introduce more of their own branded phones.
Bayer, Germany's second-biggest drugmaker, lost 1.2 percent to 19.42 euros today, for a 4.6 percent decline since last Friday.
Vendex tumbled 13 percent this week to 8.50 euros. The company expects a loss of as much as 50 million euros (US$57 million) at its Vroom & Dreesmann unit this fiscal year after revenue from cosmetics and music fell in the second quarter. Sales at the subsidiary slipped about 5 percent in the three months ended in June.
MMO2, the fourth-biggest UK mobile phone company, fell 3.2 percent to £0.5325 after Goldman Sachs lowered its recommendation to "underperform" from "in-line." The company and rivals in the UK may have to reduce tariffs as competition mounts, according to the brokerage. MMO2 shares lost 8.2 percent in the week.
Vodafone Group Plc, the world's largest wireless service provider, slipped 1.5 percent to £1.1925, a 2.1 percent drop for the week. Orange, France Telecom SA's wireless unit, lost 3 percent to 7.40 euros.
Serco Group Plc, one of the UK Ministry of Defence's biggest service contractors, fell 2.2 percent to £1.545 after saying yesterday following the close of trading that it was taking a £4.5 million (US$7.5 million) one-time cost related to reorganizing its business.
Yesterday the shares slid 6.2 percent, the biggest drop in almost four months, after Merrill Lynch & Co analyst Paul Steegers downgraded the company to "neutral" from "buy," citing concern about reorganization costs.
William Hill Plc, the UK's second-largest betting chain, rose 2.5 percent to .£2.90. The company said first-half earnings increased at least 25 percent after it installed more gaming machines.
"Trading has continued to be excellent," Ivor Jones, an analyst at Citigroup Inc.'s Smith Barney unit, wrote in a research note. "The greater range of games in the shops is capturing" increasing spending from customers. Citigroup has an "outperform" recommendation on William Hill shares and a £3.30-a-share price target.
Corus Group Plc, Europe's third-biggest steelmaker, rose 28 percent this week to £0.185, the second-biggest gain on the Stoxx 600 after the Irish drugmaker Elan Corp. The company on Thursday said the Dutch Central Works Council gave positive advice that will help it secure a new three-year banking facility. Corus was also raised to "buy" from "add" by analysts at HSBC Holdings Plc.
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