Stocks Tumble as Banks, GE Signal Weak Revenue Growth
Gerard Petti works on the floor of the New York Stock Exchange in New York. Photographer: Jin Lee/Bloomberg
July 16 (Bloomberg) -- Bloomberg's Courtney Donohoe reports on the performance of the U.S. equity market today. U.S. stocks slid, wiping out a weekly advance, as revenue at Bank of America Corp., Citigroup Inc. and General Electric Co. missed analyst estimates and a gauge of consumer confidence slid to the lowest in a year. Bloomberg's Pimm Fox also speaks. (Source: Bloomberg)
July 16 (Bloomberg) -- Michael Seery of Olympus Futures and John O'Donoghue, head of equities at Cowen & Co., talk about the outlook for the U.S. stock market. Seery and O'Donoghue talk with Carol Massar, Matt Miller, Adam Johnson and Dominic Chu on Bloomberg Television's "Street Smart". (Source: Bloomberg)
Asian markets slid
Tomohiro Ohsumi/Bloomberg
A pedestrian walks past an electronic stock board outside a securities firm in Tokyo.
A pedestrian walks past an electronic stock board outside a securities firm in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg
Asian stocks declined, led by the biggest slump in Japanese shares in almost six weeks, after the yen strengthened and as U.S. manufacturing weakened and Google Inc. posted disappointing earnings.
The MSCI Asia Pacific Index lost 1 percent to 115.78 at 4:05 p.m. in Tokyo and Japan’s Nikkei 225 Stock Average tumbled 2.9 percent. The Euro Stoxx 50 increased 0.4 percent to 253.86. Standard & Poor’s 500 Index futures fell 0.2 percent. The yen gained versus all 16 of its major counterparts and rose toward the strongest level this year.
Asian markets slid after a Federal Reserve report showed factory output fell 0.4 percent in June and as Google reported lower-than-estimated earnings. Shares of Japanese exporters dived as the yen appreciated, reducing their overseas earnings.
“Investors are reacting to the negative data that point to some slowdown in economic activity,” said Chu Moon Sung, a fund manager at Shinhan BNP Paribas Asset Management Co. in Seoul, which manages $26 billion.
Almost three stocks retreated for each that gained among the MSCI index’s 985 companies. Nintendo Co. dropped 2.6 percent after its U.S. sales fell by a third in June. Sony Corp. plunged 5.1 percent and Nissan Motor Co. declined 3.4 percent as the yen headed for a 1.6 percent gain this week. The Japanese currency traded at 87.27 per dollar from 87.40 in New York yesterday, approaching this year’s high of 86.97 set on July 1.
Goldman Settlement
Stocks fell in the U.S. yesterday before staging a rebound in the final hour of trading. Losses were limited as Goldman Sachs Group Inc. agreed to a $550 million settlement with the Securities and Exchange Commission, the Senate passed a financial-industry regulation measure and BP Plc said it stopped the flow of oil at its leaking well in the Gulf of Mexico for the first time since April. The S&P 500 rose 0.1 percent.
Goldman Sachs surged 4.4 percent. That helped overshadow the 4 percent decline in Google after it reported profit excluding some items of $6.45 a share in the second quarter. Analysts estimated $6.52 a share, based on a Bloomberg survey.
Agricultural Bank of China Ltd. shares climbed 2.5 percent on its first day of trading in Hong Kong. The stock fell 0.4 percent in Shanghai, erasing part of yesterday’s gains that marked the smallest first-day advance among the nine lenders that have sold shares in the city. CapitaMalls Malaysia Trust, the nation’s second-biggest real estate investment trust that also debuted for the first time today, fell 2.5 percent.
Consumer Prices
New Zealand’s dollar strengthened 1.6 percent to 71.81 U.S. cents from 72.75 cents after Statistics New Zealand said consumer prices rose 0.3 percent in the first quarter. That’s smaller than the median estimate of a 0.4 percent gain in a Bloomberg survey of 15 economists, giving central bank Governor Alan Bollard room to raise interest rates at a gradual pace.
The U.S. is scheduled to release its consumer price index today, which may show a 0.1 percent decrease compared with May, according to the median estimate of economists surveyed by Bloomberg. A separate report may also show U.S. household sentiment deteriorated this month.
Reports yesterday also showed producer prices declined 0.5 percent in June following a 0.3 percent drop the month before and factories pulled back in the Philadelphia and New York regions this month.
“The market is becoming increasingly worried about downside risks to the U.S. economy,” said Toshiya Yamauchi, a senior foreign-exchange analyst in Tokyo at Ueda Harlow Ltd.
-- With assistance from Shani Raja and Lisa Pham in Sydney, Nick Gentle in Hong Kong and Rocky Swift in Tokyo.
To contact the reporters for this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net.
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