European stocks fell for a second straight week, led by technology and financial companies, as Intel Corp cut its profitability forecast and Warren Buffett said the "party is over" for insurers.
STMicroelectronics NV, Europe's largest semiconductor maker, had its biggest weekly drop since December 2002 as Intel said flash-memory prices will fall about twice as fast this quarter as predicted. Allianz SE and Axa SA slumped after billionaire investor Buffett said profit margins for insurers will drop "significantly." UBS AG sank on speculation that Europe's largest bank will announce further writedowns.
The Dow Jones STOXX 600 Index dropped 3.4 percent to 307.98, the biggest weekly retreat in a month. The regional gauge has declined 16 percent this year on concern that the collapse of US subprime mortgages and a slowdown in the world's largest economy will curb profit growth in Europe.
"The earnings outlook is clouded for a lot of companies," said Job Curtis, who helps manage about US$2.2 billion at Henderson Global Investors in London. "The jury is still out on the US economy."
Analysts have cut their profit growth estimates for this year for companies in the STOXX 600 to 3.3 percent from 11 percent at the end of last year, estimates compiled by Bloomberg show.
Banks and securities firms globally have posted losses exceeding US$188 billion since the start of last year as the impact of defaults on subprime mortgages rippled through financial markets.
The US government on Friday reported an unexpected loss of 63,000 jobs last month, defying economists' forecasts for a gain of 23,000.
Germany's DAX declined 3.5 percent for the week, while France's CAC 40 lost 3.6 percent and the UK's FTSE 100 fell 3.1 percent.
The STOXX 50 retreated 4.1 percent, while the Euro STOXX 50, a measure for the euro region, sank 4 percent.
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