European stocks fell for a second day as Japanese exports tumbled and investors speculated that victory in regional elections for Spain’s Prime Minister Mariano Rajoy reduces pressure for him to seek a bailout.
Veolia Environnement SA retreated 5 percent after denying it’s working on a merger with Suez Environnement. Nexans SA (NEX) slid 6.6 percent after cutting its forecasts. Royal Philips Electronics NV climbed the most in more than a year after the world’s largest lighting company reported profit that beat estimates. Scania AB advanced 3.2 percent as the truckmaker’s orders declined at a slower pace.
The Stoxx Europe 600 Index (SXXP) slipped 0.4 percent to 272.95 at the close, having earlier risen as much as 0.3 percent. The measure lost 0.8 percent on Oct. 19 as European Union leaders failed to discuss additional assistance for Spain at a summit in Brussels. The gauge has still rallied 17 percent from the June 4 low as the European Central Bank unveiled a bond-purchase program to support the economy.
“There remains plenty of uncertainty surrounding Spain and its next move, together with the fact that we still don’t have a firm date for when Greece will be injected with the second round of bailout funds,” Ishaq Siddiqi, a market strategist at ETX Capital in London, wrote in an e-mail. “Both issues will surely come back to haunt investors in the sessions ahead.”
Japan’s exports slid 10.3 percent in September from a year earlier, leaving a trade deficit of 558.6 billion yen ($7 billion), the Finance Ministry said in Tokyo today. The median forecast in a Bloomberg survey of analysts was for a 9.9 percent export decline. The drop was the most since May 2011, two months after a magnitude-9 quake struck Japan’s northeast, triggering a tsunami and a nuclear disaster that led to the shuttering of most of the nation’s reactors.
National benchmark indexes fell in 11 of the 18 western European markets. The U.K.’s FTSE 100 (UKX) slipped 0.2 percent and France’s CAC 40 lost 0.6 percent. Germany’s DAX dropped 0.7 percent. Greece’s ASE surged 2.7 percent.
The volume of shares changing hands in Stoxx 600 companies was 20 percent less than the 30-day average, according to data compiled by Bloomberg.
In Spain, Rajoy’s party extended its majority in the stronghold region of Galicia, winning 41 of the 75 seats in the regional assembly. Spanish bonds fell, sending the yield on 10- year debt up 11 basis points to 5.48 percent.
Greek Prime Minister Antonis Samaras will meet with the heads of the parties supporting his coalition government tomorrow to discuss 13.5 billion euros ($17.6 billion) of budget measures for 2013 and 2014 to persuade creditors to release further funds for the debt-stricken nation.
“We have been a little bit defensive going into the year end,” Stephen Cohen, head of investment strategy in Europe, the Middle East and Africa at BlackRock Inc.’s iShares unit, said on Bloomberg Television in London. “The impact of central-bank liquidity is easing off a little bit so we are back to the big picture question -- can some of the big structural issues be resolved?”
In the U.S., of the six companies in the Standard & Poor’s 500 Index (SPX) to report results today, four had revenue that missed analysts’ estimates, including Caterpillar Inc., according to data compiled by Bloomberg. Fifty-nine percent of companies in the gauge have missed third-quarter sales projections since Oct. 9, the data show.
Veolia, the world’s largest water company, fell 5 percent to 8.09 euros and Suez Environnement dropped 1.6 percent to 8.30 euros after denying merger talks.
Suez Chief Executive Officer Jean-Louis Chaussade contacted Veolia (VIE)’s Antoine Frerot in August to propose a merger, Le Monde reported on Oct. 20. Discussions were called off following meetings the next month involving Goldman Sachs Group Inc., Deutsche Bank AG and Rothschild, the newspaper said.
Nexans tumbled 6.6 percent to 34 euros, dropping the most in almost six months. The world’s second-biggest maker of cables reduced its full-year revenue forecast, predicting “stable” sales compared with a previous prediction for “slight organic growth.”
Valeo SA (FR), France’s second-largest car-parts maker, slid 3.9 percent to 34.57 euros as the stock was reduced to hold from buy at Deutsche Bank. A gauge of auto shares was the worst performer in the Stoxx 600.
Aggreko Plc (AGK), the world’s biggest provider of mobile power supplies, slipped 3 percent to 2,073 pence. The company was cut to underweight, the equivalent of sell, from neutral at HSBC Holdings Plc.
Philips advanced 5.8 percent to 20.11 euros, the biggest gain since September 2011. The company said third-quarter earnings before interest, taxes, amortization and one-time items rose 43 percent to 562 million euros. Analysts in a Bloomberg survey had predicted 520 million euros. Sales of 6.13 billion euros beat a 5.95 billion-euro prediction.
Scania rose 3.2 percent to 124.20 kronor. The Swedish truckmaker controlled by Volkswagen AG said orders for its trucks and buses fell 10 percent in the third quarter, compared with a 14 percent drop in the previous period. Net income of 1.5 billion kronor ($230 million) was in line with analysts’ estimates.
OC Oerlikon AG rallied 3.7 percent to 9.43 Swiss francs. The Swiss maker of textile machinery and car gears said Chinese regulators approved the sale of its solar division to Tokyo Electron Ltd.
Salzgitter AG (SZG), Germany’s second-biggest steelmaker, gained 2.6 percent to 34.38 euros as Credit Suisse Group AG raised the stock to outperform, the equivalent of buy, from neutral.
Bankia SA (BKIA) surged 5.3 percent to 1.16 euros with bank shares the biggest gainers on the Stoxx 600. National Bank of Greece SA (ETE), the nation’s largest lender, advanced 5.2 percent to 2.42 euros. Commerzbank AG added 2.9 percent to 1.56 euros.
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