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.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
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