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Swiss Stocks Drop After U.S. Consumer-Sentiment Report

Stocks in Switzerland fell, with the benchmark Swiss Market Index slipping from a 4 1/2-year high, as a report showed U.S. consumer confidence declined to the lowest level since 2011.

UBS AG (UBSN) declined after a U.S. court order required the bank to give records relating to Wegelin & Co. as part of a probe into tax evasion. Novartis AG (NOVN) dropped as a ruling prevented its Sandoz unit from selling a generic drug in the U.S. until August 2014. Dufry AG retreated 2.5 percent after Exane BNP Paribas cut its rating of the stock.

The SMI (SMI) lost 0.4 percent to 7,458.03 at the close of trading in Zurich. The gauge has still rallied 9.3 percent in 2013 for the best start to a year since the measure was formed in 1988. The measure jumped 1.2 percent last week as the Swiss franc weakened against the euro and the U.S. House of Representatives voted to suspend the government’s borrowing limit. The broader Swiss Performance Index also declined 0.4 percent today.

“Following last week’s sharp rise, there’s still a need of a bit of a consolidation,” Benno Galliker, a trader at Luzerner Kantonalbank AG, wrote in a note to clients today. “Generally speaking, however, most factors speak for a continuation of the rally.”

The volume of shares changing hands in SMI-listed companies was 12 percent lower than the average of the last 30 days, data compiled by Bloomberg showed.

Consumer Confidence

Confidence among U.S. consumers declined more than forecast in January, reaching the lowest level in more than a year. The Conference Board’s index decreased to 58.6, the weakest since November 2011, from a revised 66.7 in December, figures from the New York-based private research group showed today. The January reading was lower than the most pessimistic forecast in a Bloomberg survey, which had a median estimate of 64.

In Germany, consumer confidence will increase in February due to a stable labor market and higher income expectations, Gfk SE said. The Nuremberg-based market research company forecast today that its consumer-sentiment index, based on a survey of about 2,000 people, will rise to 5.8 from a revised 5.7 in January.

UBS retreated 0.4 percent to 16.24 Swiss francs. U.S. District Judge William H. Pauley III authorized the Internal Revenue Service to serve a summons on UBS. The tax agency seeks records of Wegelin’s correspondent account at UBS. Wegelin admitted on Jan. 3 that it helped taxpayers hide more than $1.2 billion in assets from the IRS.

Credit Suisse

Credit Suisse Group AG (CSGN), Switzerland’s second-largest bank, slipped 1.2 percent to 27.11 francs. A gauge of European lenders posted the worst performance of the 19 industry groups in the Stoxx Europe 600 Index.

Novartis AG, Europe’s biggest drugmaker, fell 0.5 percent to 62.40 francs.

Allergan Inc. won a U.S. appeals court ruling yesterday that prevented Teva Pharmaceutical Industries Ltd. and Novartis AG’s Sandoz unit from selling a generic version of the glaucoma treatment Lumigan until August 2014.

Dufry (DUFN) fell 2.5 percent to 122 francs after Exane BNP Paribas cut the Swiss operator of duty-free stores in airports to neutral from outperform. Exane cited a less-promising outlook for 2013.

Kudelski SA (KUD), the world’s biggest maker of security cards for pay television, lost 3.2 percent to 10.70 francs.

Schlatter Holding AG (STRN) surged 28 percent to 185 francs, the biggest drop since at least July 1996, after falling 26 percent in the past three trading days.

To contact the reporters on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net; 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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