The Dow Jones Stoxx 600 Index of European shares headed for its first weekly gain in four weeks as drugmakers including GlaxoSmithKline Plc and tobacco companies such as Gallaher Group Plc rose. Zurich Financial Services AG slid as Merrill Lynch & Co cut its profit forecast for the insurer.
Pharmaceutical and tobacco companies, whose products are still in demand when growth weakens, have advanced since last Friday amid mounting evidence economies are slowing. The pace of expansion in European manufacturing fell in July, and the US economy grew less than half as much as expected in the second quarter, reports this week have showed.
"While we are putting cash to work, we are only buying solid, cash-generative companies," said Chris Alexander, who helps manage euro 7 billion (US$11 billion) as head of UK equity research at Carr Sheppards Crosthwaite in London. He favors companies such as Tesco Plc, the largest UK food retailer, and Unilever, the world's No. 1 soap and food company.
The Stoxx 600 erased a gain of as much as 0.6 percent and closed .2 percent lower at 217.82. It has climbed 1.3 percent since last Friday. The narrower Stoxx 50 Index added 0.1 percent to 2,605.55.
European consumers became more pessimistic in July and are making fewer major purchases than at any time in the past five years, and the US created fewer jobs than expected in July, reports showed Friday.
Benchmark indexes retreated in five of Europe's eight biggest share markets. Two shares declined for every one that advanced in the Stoxx 600.
The Stoxx 50 swung as high as 2,624.53 and as low as 2,572.35 during the session.
Zurich Financial, Switzerland's largest insurer, dropped 2 percent to 144 Swiss francs. Companies in the industry are grappling with a stock-market slump that is wiping billions of dollars from the assets they hold to pay claims and back new business.
"A greater dose of reality will still hurt sector performance," Brian Shea, an analyst at Merrill Lynch, said in a note to investors.
Allianz AG, Europe's No. 1 insurer, shed 4 percent to 133.49 euros after its forecast was cut. Alleanza Assicurazioni SpA shed 2.6 percent to 7.28 euros after Merrill also reduced its profit estimate for Italy's biggest life-insurance company.
Spain's IBEX 35 Index gained 0.7 percent, rebounding from a three-day, 8.8 percent loss. After trading ended Thursday, the International Monetary Fund said it may let Brazil delay repaying about $14 billion in loans. That lifted shares of companies that have invested in South America's largest economy, such as Endesa SA, Spain's largest power provider.
Endesa, which got 15 percent of its first-half operating earnings from Brazil, added 4.2 percent to 11.12 euros. Santander Central Hispano SA, the biggest Spanish lender and owner of Brazil's fifth-largest bank, rose 3.3 percent to 6.20 euros.
Royal Philips Electronics NV led declines by semiconductor makers after US rival National Semiconductor Corp said first-quarter sales will rise less than forecast as customers reduce orders. Philips, Europe's No. 3 semiconductor maker, shed 10 percent to 19.20 euros.
STMicroelectronics NV, Europe's largest maker of computer chips, fell 6.3 percent to 19.40 euros. No. 2 Infineon Technologies AG declined 6 percent to 12.65 euros.
Chip stocks also dropped as Mark Edelstone, an analyst at Morgan Stanley, cut his forecast for revenue growth in the industry next year to between 15 percent and 20 percent, citing concern about the speed of a US economic recovery.
Fiat SpA shed 4.3 percent to 9.76 euros. Shares of Italy's biggest manufacturer slid to their lowest in 17 years during the session on concern Fiat's credit rating may be cut to below investment grade as losses at the company's auto unit widen.
MLP AG tumbled 49 percent, for a loss this week of 58 percent, to 8.00 euros. The German insurance broker said first-half profit was little changed.
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
It was late morning and steam was rising from water tanks atop the colorful, but opaque-windowed, “soapland” sex parlors in a historic Tokyo red-light district. Walking through the narrow streets, camera in hand, was Beniko — a former sex worker who is trying to capture the spirit of the area once known as Yoshiwara through photography. “People often talk about this neighborhood having a ‘bad history,’” said Beniko, who goes by her nickname. “But the truth is that through the years people have lived here, made a life here, sometimes struggled to survive. I want to share that reality.” In its mid-17th to
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