Swiss Stocks Retreat; Zurich Financial Falls, Transocean Gains

Swiss stocks dropped, extending the Swiss Market Index (SMI)’s weekly slide, as U.S. economic growth missed forecasts and Greece’s government continued discussions with bondholders on a debt swap.

Zurich Financial Services AG and Credit Suisse Group AG (CSGN) led declining shares. Transocean Ltd. (RIGN) added 0.9 percent after a judge ruled that BP Plc can’t collect part of its $40 billion spill costs from the company.

The SMI, a measure of the biggest and most actively traded companies, slipped 1.1 percent to 6,033.52 at the close in Zurich, posting a 1.5 percent drop this week. The gauge has still climbed 1.6 percent this year amid signs that the U.S economy is recovering and as investors speculated that the euro area will contain its debt crisis. The broader Swiss Performance Index dropped 0.9 percent today.

“Market participants are somehow realizing again that the Greek problem is far from over,” said Stephane Ekolo, chief European strategist at Market Securities in London. “The stock market really needs to retreat significantly unless we see concrete signs of a solution for the European debt crisis.”

The Institute of International Finance, which represents private creditors, said that it made “some progress” at a meeting last night in Athens between managing director Charles Dallara and Greek Prime Minister Lucas Papademos.

Greek Talks

Greece and its creditors have haggled over how to reduce the country’s borrowings three months after private bondholders agreed to a 50 percent cut in the face value of more than 200 billion euros ($262 billion) of debt by voluntarily swapping bonds for new securities.

European Union Economic and Monetary Affairs Commissioner Olli Rehn said authorities are “very close” to reaching an agreement on a private-sector involvement in Greece this month.

The U.S. economy expanded less than forecast in the fourth quarter as consumers curbed spending and government agencies cut back. Gross domestic product, the value of all goods and services produced, climbed at a 2.8 percent annual following a 1.8 percent gain in the prior quarter, Commerce Department figures showed. The median forecast of 79 economists surveyed by Bloomberg called for a 3 percent increase.

Zurich Financial slid 2.2 percent to 224.70 Swiss francs. Chief Investment Officer Cecilia Reyes said income from bond investments will stay “low for years to come” as central banks keep borrowing costs near zero to help bolster their economies. She made the comments in an interview at the World Economic Forum in Davos, Switzerland, yesterday.

Banks Drop

Credit Suisse, Switzerland’s second-largest bank, retreated 0.9 percent to 24.46 francs. UBS AG (UBSN), the biggest, slid 0.9 percent to 12.87 francs.

Transocean added 0.9 percent to 43.83 francs, the highest price in 10 weeks. BP can’t collect from Transocean part of the $40 billion in cleanup costs and economic losses caused by the 2010 oil well blowout and Gulf of Mexico spill, a judge ruled. BP must indemnify Transocean for pollution-related economic damage claims under its drilling contract, U.S. District Judge Carl Barbier in New Orleans said yesterday.

Petroplus Holdings AG jumped 56 percent to 25 centimes. Gary Klesch, chairman of commodity investment firm Klesch Group, said he may acquire three plants belonging to the insolvent Swiss oil refiner. Petroplus has still dropped 83 percent this week.

Nobel Biocare Holding AG (NOBN) rallied 2.7 percent to 12.72 francs. Alliance Bernstein LP named the stock among its pick of European medical-devices companies.

Vontobel Holding AG (VONN) gained 0.4 percent to 25.55 francs. The Swiss bank and brokerage was raised to “buy” from “neutral” at Goldman Sachs Group Inc.

Gurit Holding AG (GUR) advanced 0.7 percent to 475.25 francs as the maker of composite plastics was raised to “buy” from “neutral” at Helvea AG.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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