Most Swiss Stocks Fall as ECB Outlook Offsets U.S. Data

Most Swiss stocks dropped as European Central Bank President Mario Draghi said he sees risks to the euro-area economic outlook, overshadowing better-than-forecast U.S. jobs reports.

Adecco SA (ADEN), the world’s biggest supplier of temporary workers, declined 2.2 percent. Logitech International SA (LOGN), the largest maker of computer mice, slipped 1.3 percent. Barry Callebaut AG (BARN) fell 2 percent after the biggest maker of bulk chocolate posted sales that missed analysts’ estimates.

The Swiss Market Index (SMI) rose less than 0.1 percent to 6,202.32 at the close of trading in Zurich. Thirteen stocks declined and seven rose even after the ECB and the People’s Bank of China cut their benchmark borrowing costs and the Bank of England boosted the size of its asset-purchase program. The gauge has rallied 2.2 percent this week, extending the 2012 advance to 4.5 percent. The Swiss Performance Index was also little changed percent today.

“The ECB, China, and BOE news today may have already been baked into the cake over the past few trading sessions,” said Serge Berger, a trader at Blue Oak Advisors LLC in Zurich. “The central banks gave the market what it wanted, which is likely why the investors are selling the news.”

The ECB cut interest rates to a record low and said it won’t pay anything on overnight deposits. Policy makers lowered the main refinancing rate to 0.75 percent from 1 percent, as predicted by 49 of 64 economists in a Bloomberg News survey, and cut its deposit rate to zero from 0.25 percent.

Speaking after the decision was announced, ECB President Draghi said some “downside risks to the euro-area economic outlook have materialized” and “economic growth in the euro area continues to remain weak.”

China Rates

China cut benchmark interest rates for the second time in a month and allowed banks to offer bigger discounts on their lending costs. The one-year lending rate will fall by 31 basis points and the one-year deposit rate will drop by 25 basis points effective tomorrow, the People’s Bank of China said. Banks can offer loans of as much as 30 percent less than benchmark rates.

The Bank of England’s Monetary Policy Committee raised its asset-purchase target by 50 billion pounds ($78 billion) to 375 billion pounds. Thirty out of 41 economists had forecast the move in a Bloomberg survey. Policy makers also left their benchmark rate at a record low of 0.5 percent today.

In the U.S., a report showed that companies added more workers than forecast in June, while fewer Americans than estimated filed claims for unemployment benefits last week.

U.S. Economy

U.S. companies added 176,000 people last month following a revised 136,000 gain the prior month that was higher than initially estimated, according to ADP Employer Services. Applications for jobless benefits decreased by 14,000 in the week ended June 30 to 374,000, the fewest since mid May, Labor Department figures showed.

“ADP data from the U.S. were positive,” said Blue Oak’s Berger. “There’s so much data out that investors will have to digest the news. Attention will then turn to the earnings season and to any major news coming from the euro area.”

Alcoa Inc., America’s biggest aluminum producer, is due to kick off the U.S. earnings-reporting season on July 9.

Adecco slipped 2.2 percent to 42.43 francs after British recruitment company Robert Walters Plc said its net fee income dropped 3 percent in the second quarter.

Logitech declined 1.3 percent to 10.15 francs, the largest drop in three weeks.

Barry Callebaut fell 2 percent to 839.50 francs. The company posted nine-month sales of 3.59 billion francs ($3.7 billion). That fell short of the median analyst estimate compiled by Bloomberg for revenue of 3.69 billion francs.

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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