European Stocks Decline Before U.S. GDP Data; Lafarge Slides
Lafarge SA chief executive officer Bruno Lafont. Photographer: Antoine Antoniol/Bloomberg
July 30 (Bloomberg) -- Jan Loeys, global head of market strategy at JPMorgan Chase & Co., talks about the global economy and the prospects of a renewed recession. He speaks with Andrea Catherwood on Bloomberg Television's "The Pulse." (Source: Bloomberg)
European stocks fell for a third day after a government report showed the U.S. grew less than forecast in the second quarter, adding to concern that the recovery of the world’s largest economy is slowing.
Lafarge SA led a selloff in construction-related companies after the world’s biggest cement maker cut its outlook for demand. HeidelbergCement AG retreated 3.4 percent as earnings trailed estimates. Gamesa Corporacion Tecnologica SA slumped 12 percent after the Spanish maker of wind turbines reduced its sales forecast. Alcatel-Lucent SA rallied 11 percent after confirming its full-year margin targets.
The Stoxx Europe 600 Index dropped 0.4 percent to 255.35 at the 4:50 p.m. close in London after figures from the Commerce Department showed U.S. gross domestic product increased at a 2.4 percent annual rate last quarter. The gauge recouped some of its losses after a private survey of consumer confidence topped estimates. The gauge has still climbed 4.9 percent in July, its first monthly gain since March.
“It’s a pretty weak GDP number,” said Manoj Ladwa, a London-based senior trader at ETX Capital. “Everyone is looking toward the U.S. for growth and it’s not forthcoming. It’s not a great finish to the month.”
The U.S. growth number missed the 2.6 percent median forecast of economists surveyed by Bloomberg News. Today’s GDP report follows data earlier in the week on U.S. durable-goods orders and consumer confidence that also trailed estimates.
Consumer Sentiment
The Thomson Reuters/University of Michigan final index of consumer sentiment, released today, was higher than had been estimated. The index declined to 67.8 this month from 76 in June, topping the 67 median forecast by 58 economists in a Bloomberg News survey.
National benchmark indexes fell in 15 of the 18 western European markets today. The U.K.’s FTSE 100 slid 1.1 percent as a GfK NOP report showed consumer confidence fell more than forecast in July as the prospect of government spending cuts undermined optimism on the economic recovery. France’s CAC 40 retreated 0.2 percent, while Germany’s DAX gained 0.2 percent.
Spain’s IBEX 35 slid 1.5 percent after Moody’s Investors Service said it will probably downgrade the Iberian nation’s credit rating.
Lafarge sank 3.9 percent to 41.80 euros in Paris, leading a gauge of construction-related companies to the biggest drop among 19 industry groups in the Stoxx 600.
Lafarge Forecast
The cement maker said it expects volumes in its markets to increase 3 percent at best, less than a previous forecast for an increase of as much as 5 percent. In the worst case, they may fall by 1 percent instead of being unchanged. The company also reported a 15 percent drop in second-quarter profit to 329 million euros ($429 million).
HeidelbergCement, the world’s largest maker of aggregates used to produce concrete and asphalt, declined 3.4 percent to 38.65 euros after second-quarter net income sank 64 percent to 120 million euros.
Gamesa sank 12 percent to 6.70 euros, the biggest retreat on the Stoxx 600. The company cut its sales goal for this year and for 2011 as European clients reduced orders amid regulatory uncertainty and lack of financing.
Rival Vestas Wind Systems A/S, the world’s largest maker of wind turbines, dropped 3.1 percent to 278 kroner.
Alcatel, Bekaert
Alcatel-Lucent rallied 11 percent to 2.30 euros after France’s biggest telecommunications equipment maker confirmed full-year growth targets. The company reported an adjusted operating profit of 28 million euros, reversing a 62 million- euro loss in the year-earlier period.
Bekaert NV jumped 11 percent to 166.90 euros after the world’s largest maker of steel cord used in tires reported first-half net income of 181 million euros, beating analysts’ estimates. The company also raised its three-year profitability forecast on the growth of its operations in China.
Shire Plc slid 2.4 percent to 1,455 pence after Sanford C. Bernstein & Co. lowered its recommendation for the drugmaker to “market perform” from “outperform.” The firm said a U.S. regulatory review may highlight the cardiovascular risks from attention deficit hyperactivity disorder drugs, such as those made by Shire.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
Rate These Stories
Rate this Page