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.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the