Swiss Stocks Drop as U.S. Jobs Report Misses Forecast; Transocean Slides

Swiss stocks declined for a second day as figures from ADP Employer Services showed U.S. companies added fewer jobs than forecast in June, overshadowing a European Central Bank announcement that it will lend European banks less money than economists had forecast.

Transocean Ltd. sank as the U.S. Justice Department asked it, BP Plc, and three other companies responsible for the Gulf of Mexico oil spill to give notice if they plan to sell any U.S.-based assets. Lonza Group AG fell 2 percent as Evolution Securities downgraded its recommendation on the European pharmaceutical industry.

The benchmark Swiss Market Index lost 16.39, or 0.3 percent, to 6,128.06. The SMI has retreated for three straight months, losing 2.9 percent in June and dropped 11 percent in the second quarter, amid speculation that Europe’s debt crisis may derail the economic recovery. The broader Swiss Performance Index fell 0.2 percent today.

“The worse-than-expected ADP number tallies with the drop- off in consumer sentiment seen on Tuesday,” David Semmens, an economist with Standard Chartered Bank in New York, wrote in an e-mail. “The sparse hiring appetite current in U.S. companies will see GDP in the second half of 2010 slow down as the consumer continues to disappoint in this recovery.”

U.S. Payrolls

Companies in the U.S. increased their payrolls by 13,000 in June, according to ADP. The median estimate of 36 economists surveyed by Bloomberg was a gain of 60,000 jobs. Yesterday, the Conference Board’s index of U.S. consumer confidence dropped more than forecast as Americans became more pessimistic on jobs and incomes.

Earlier today the Frankfurt-based ECB said it would lend banks 131.9 billion euros ($162 billion) for three months, less than economists predicted as a landmark yearlong loan expires.

Banks tomorrow need to repay 442 billion euros in 12-month funds, the largest amount the ECB has ever awarded and a key plank of the bank’s efforts to fight the financial crisis last year. Demand for the three-month cash today was a litmus test for the health of Europe’s banking system, economists said.

Transocean lost 3.6 percent to 51.2 Swiss francs. The U.S. Justice Department asked Transocean, BP, Anadarko Petroleum Corp., Halliburton Co., and Moex USA Corp. to give the government advance notice if they planned to sell any assets held within the jurisdiction of the U.S. authorities.

‘Compelling Interest’

The letters, dated June 23 and provided yesterday to Bloomberg News in response to a Freedom of Information Act request, said the U.S. has a “compelling interest” to ensure the companies don’t “deplete those assets that would be available to satisfy a judgment” should the authorities sue the companies responsible for the spill. The Justice Department letter to Transocean called the company’s $1 billion stock dividend program “troubling.”

Lonza, the world’s biggest maker of drug ingredients, slid 2 percent to 72.25 francs. Evolution Securities downgraded Europe’s pharmaceutical companies to “neutral” from “overweight.”

Compagnie Financiere Richemont SA, the world’s largest jewelry maker, dropped along with other exporters, losing 1.2 percent to 37.95 francs.

Swiss Reinsurance Co., the world’s second-largest reinsurer, lost 1.8 percent to 44.71 francs.

Novartis AG added 0.8 percent to 52.6 francs. OctoPlus NV agreed to develop a controlled-release formulation of an undisclosed compound for the drugmaker for an undisclosed sum.

Ruling Request

Separately, Novartis’s Ciba Vision unit asked a U.K. appeals court to reverse a ruling in an infringement lawsuit against Johnson & Johnson. The original ruling said that Ciba Vision’s European patent for extended-wear contact lenses is invalid.

AFG Arbonia-Forster Holding AG advanced 3.3 percent to 22 francs as the Swiss home-appliance maker was raised to “buy“ from “neutral“ at UBS AG, which cited “an unchanged positive construction outlook for Germany and Switzerland.”

Barry Callebaut AG surged 3.3 percent to 671.5 francs as the world’s largest maker of bulk chocolate said its third- quarter sales rose 16 percent as the global chocolate market improved.

Excluding currency swings, revenue rose 19 percent while shipments rose 11 percent in the three months through May, the Zurich-based company said. Shipment growth beat the 8 percent median of three analysts’ estimates gathered by Bloomberg News.

“The release of slightly better-than-anticipated nine- month top-line figures confirms the attractive growth trend of the market leader,” Berenberg Bank said in a note.

To contact the reporter on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net.

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