U.S. stocks broke a three-day winning streak and the euro slid from a three-week high against the dollar as France and Germany said they will propose a financial transaction tax and rejected the sale of common European bonds. Treasuries and gold rallied, while oil slid.
The Standard & Poor’s 500 Index declined 1 percent to 1,192.76 at 4 p.m. in New York after rallying 7.5 percent in the three previous sessions, its biggest jump since March 2009. The Stoxx Europe 600 Index lost 0.1 percent following weaker-than- forecast economic growth in the region. The euro slipped 0.3 percent to $1.4409. Ten-year Treasury yields fell eight basis points to 2.22 percent. Gold climbed to a record while oil dropped 1.4 percent.
NYSE Euronext (NYX) and Nasdaq OMX Group Inc., two of the biggest exchange operators in Europe, slid at least 2.7 percent. Caterpillar Inc. (CAT), Deere & Co (DE) and 3M Co. (MMM) each lost at least 1.4 percent, pacing declines in companies most-tied to the economy. Wal-Mart Stores Inc. (WMT) and Home Depot Inc. (HD) rose the most in theDow Jones Industrial Average after topping analysts’ earnings estimates.
“Europe will continue to be an overhang until they come up with realistic policies,” Peter Jankovskis, who helps manage about $2.6 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “We’ve already got disappointing economic numbers out of Europe earlier today. Then, you have a program which is not really doing anything to address that.”
‘Absolute Determination’
Germany and France are working on “ambitious” joint proposals to defend the euro, French President Nicolas Sarkozy said. The two countries share an “absolute determination” to defend the euro, Sarkozy told reporters in Paris today after talks with German Chancellor Angela Merkel. He said the two countries would propose a financial transaction tax in September, without providing specifics. A European financial- transaction tax was rejected in 2010.
Merkel and Sarkozy rejected euro bonds and expanding the 440 billion-euro ($633 billion) rescue fund. They proposed debt limits be written into national law and the establishing of a “euro council” to be headed by European Union President Herman van Rompuy as part of a planned “economic government” for Europe.
European leaders are scrambling to halt a government-debt crisis after concern spread last week to France, the second- largest euro economy after Germany, and calls grew for the leaders to discuss joint borrowing or a mutual guarantee among the 17 euro states.
‘More Dramatic Announcement’
Sarkozy said today that euro bonds may be “imaginable one day,” but there’s not enough integration to justify their introduction now.
Earlier losses in equities followed a report that showed European economic growth slowed more than forecast in the second quarter as Germany’s recovery almost ground to a halt amid the worsening sovereign-debt crisis. Gross domestic product in the 17-nation euro area rose 0.2 percent from the first quarter, the worst performance since the euro region emerged from a recession in late 2009. Economists had forecast growth of 0.3 percent, according to the median of estimates in a Bloomberg News survey.
“Following the weak GDP data this morning, the markets were hoping that we would have seen a more dramatic announcement to support the euro markets and we did not receive that,” Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York, said in an e-mail. “The markets declined when a financial transaction tax was raised, as the concern is this will hurt the already weak economies of Europe.”
Sweden’s Levy
A 1996 report on financial transactions taxes for the Canadian government found that Sweden’s 1984 levy of 1 percent on equity trades, doubled two years later, caused half of the country’s trading to move to London by 1990, a year before the tax was abolished. Capital gains revenues decreased as volume sank, “almost entirely offsetting revenues from the equity transactions tax,” the report said.
The S&P 500’s retreat today was led by financial firms, energy producers and industrial companies. Freeport-McMoRan Copper & Gold Inc. dropped 1.4 percent as copper prices sank. Citigroup Inc. and Bank of America Corp. lost at least 4.2 percent after billionaire John Paulson reduced his positions in both lenders last quarter.
The benchmark index rose 2.2 percent yesterday, erasing all of its losses from last week following S&P’s reduction of the U.S.’s AAA credit rating for the first time.
Housing Slump
U.S. equities also retreated today after the Commerce Department said housing starts fell last month, in a sign that residential real estate is failing to contribute to American growth two years into an economic recovery. A separate report showed industrial production in the U.S. climbed in July by 0.9 percent, the most this year and almost twice as fast as economists forecast, as carmakers started to shake off the effects of the disaster in Japan and higher temperatures boosted utility use.
Billionaire Warren Buffett said his Berkshire Hathaway Inc. made its biggest bets on stocks this year on Aug. 8, when the S&P 500 plunged 6.7 percent, its worst drop since December 2008, after the U.S. was stripped of its AAA credit rating at S&P. Berkshire Hathaway increased its stake in Wells Fargo & Co., building equity holdings amid the market decline, according to a filing yesterday.
“I like buying on sale,” Buffett, Berkshire’s chief executive officer and head of investments, said in an interview with Charlie Rose. “Last Monday, we spent more money in the stock market buying than any day this year.”
Wal-Mart, Home Depot
Wal-Mart gained 3.9 percent as the world’s largest retailer boosted its profit forecast for the year after its Sam’s Club wholesale chain helped the company halt a decline in sales at its U.S. stores. Home Depot added 5.3 percent after the largest U.S. home improvement retailer raised its full-year profit forecast after second-quarter profit exceeded analysts’ estimates.
“People are desperate for stability in unpredictable times,” Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc., which oversees $4 billion, said in a telephone interview. “Europe is a mess. There’s no easy answer on how to get economic growth going again.”
U.S. Treasuries extended gains following the rejection of euro bonds by Merkel and Sarkozy, as investors sought refuge in U.S. debt. The early advance in Treasuries came amid speculation the Federal Reservemay take further action to support the U.S. economy if it weakens further. Fed Chairman Ben S. Bernanke may announce policy intentions at a conference in Jackson Hole, Wyoming, later this month. The yield on the 30-year Treasury bond declined 11 basis points to 3.66 percent.
Fitch Affirms
Fitch affirmed its AAA credit rating for the U.S. and said the outlook is stable, citing the nation’s central role in the global financial system and the flexible, diverse economy. Fitch had put the rating under review after lawmakers reached a compromise Aug. 2 on a debt-limit agreement that prevented a U.S. default. S&P on Aug. 5 cut its U.S. rating to AA+ from AAA, saying lawmakers failed to cut spending enough to reduce record deficits. Moody’s Investors Service affirmed its top U.S. ranking last week.
The euro slumped against 12 of its 16 major counterparts. The currency fell earlier after data showed slower-than-forecast economic growth for the region. The euro initially pared losses as Sarkozy defended the currency, then resumed sinking after France and Germany rejected euro bonds. The Markit iTraxx SovX Western Europe Index of credit-default increased four basis points to 279.
Emerging Markets
The MSCI Emerging Europe, Middle East and Africa Index fell 1 percent, its first decline in four days. Russia’s Micex Index slid 2 percent, the most since Aug. 10. South Korea’s Kospi Index (KOSPI) rose 4.8 percent following a holiday yesterday.
Spanish two-year yields rose two basis points to 3.22 percent even as the European Central Bank bought the nations’ debt, according to three people with knowledge of the transactions. An ECB spokesman declined to comment. The yield on the 10-year Italian bond fell four basis points.
The Swiss franc erased gains against its major peers, falling 1.2 percent against the dollar after gaining as much as 0.9 percent earlier. Swiss National Bank Vice President Thomas Jordan said the central bank is assessing “a whole range of options” to counter the franc’s strength, according to an Aug. 11 interview in Tages-Anzeiger. The currency appreciated to a record 1.00749 per euro on Aug. 9.
Pound, Gold
Britain’s pound appreciated 0.7 percent against the euro after data showed inflation accelerated more than economists predicted last month. Consumer prices rose at an annual 4.4 percent rate, after a 4.2 percent increase in June, the Office for National Statistics said in London. Economists forecast 4.3 percent.
The Dollar Index, which tracks the U.S. currency against those of six trading partners, climbed 0.2 percent.
Gold rose to a record settlement as the sagging European economy spurred demand for the metal as an investment haven. Gold futures rose 1.5 percent to $1,785 an ounce. Oil for September delivery fell 1.4 percent to settle at $86.65 after dropping as much as 2.6 percent. Copper for December delivery declined 1 percent to $4.013 a pound.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net
댓글 없음:
댓글 쓰기