Swiss Stocks Retreat on Ireland Referendum, U.S. Data

Swiss stocks declined for a third day after Ireland said it will hold a referendum to ratify the European fiscal compact and reports showed U.S. durable goods orders and home prices fell more than forecast.

UBS AG (UBSN) and Credit Suisse Group AG (CSGN), the country’s two largest lenders, retreated. Logitech International SA (LOGN), the world’s biggest maker of computer mice, slipped for a second day. PSP Swiss Property AG (PSPN) rose after reporting an increase in 2011 net income.

The Swiss Market Index (SMI), a measure of Switzerland’s largest and most actively traded companies, retreated 0.3 percent to 6,125.09 at the close in Zurich. The gauge has still advanced 3.2 percent this year as the European Central Bank increased lending to banks and U.S. economic reports topped forecasts. The broader Swiss Performance Index also slid 0.3 percent today.

Ireland’s Prime Minister Enda Kenny said the country will hold a referendum to ratify the European fiscal compact.

The Irish government has to hold a referendum should a treaty change the country’s existing constitution. Irish voters rejected changes to the European treaty in 2001 and 2008, before reruns passed the proposals.

A U.S. Commerce Department report showed that orders for durable goods fell in January by the most in three years. Bookings for goods meant to last at least three years slumped 4 percent. Economists had projected a 1 percent decline, according to the median forecast in a Bloomberg News survey.

‘Weak Indication’

“The figures are disappointing and surprising in light of the recent improvements in sentiment,” wrote Ralf Umlauf, head of floor research at Helaba Landesbank Hessen-Thueringen in Frankfurt, in e-mailed comments. “If February shows no recovery, it would be a very weak indication for the investment activities in the first quarter.”

House prices in 20 U.S. cities dropped in December more than economists had predicted to their lowest level since the housing crisis began in mid-2006.

German Chancellor Angela Merkel won a parliamentary vote on Greek aid after warning lawmakers that pushing Greece out of the euro risked “incalculable” damage.

“The temporary rescue of Greece had already been priced into the markets,” said Christian Zogg, who manages about $540 million at LLB Asset Management in Vaduz, Liechtenstein. “Investors can’t shake off the prospect that a possible third package could be necessary in the near future, and that’s certainly not positive.”

Greece’s credit ratings were cut to “selective default” by Standard & Poor’s after the Mediterranean nation negotiated the biggest sovereign-debt restructuring in history.

Financial Shares Fall

UBS and Credit Suisse dropped 0.6 percent to 12.68 Swiss francs and 0.4 percent to 24.61 francs, respectively. Swiss Re Ltd., the world’s second-biggest reinsurer, fell 1.8 percent to 53.40 francs.

Logitech declined 1.6 percent to 7.58 francs.

Lonza Group AG (LONN) dropped 3.3 percent to 47.44 francs, its six-month low. Nobel Biocare AG retreated 1.7 percent to 10.68 francs.

PSP Swiss Property advanced 1.3 percent to 77.60 francs after the real-estate company reported that 2011 net income, excluding changes in fair value, rose 6.6 percent to 404 million francs ($450 million) and said that the outlook for this year remains “optimistic.”

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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

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