Swiss Stocks Retreat as UBS Delays Profitability Target

Swiss stocks fell from their highest level in five months as UBS AG (UBSN) said it probably won’t reach its profitability goal until at least 2016, while investors awaited the outcome of a two-day Federal Reserve meeting.

UBS slumped 6.2 percent after pushing back the target because of demands for more capital from its regulator in Switzerland. Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER) both lost more than 1 percent.

The Swiss Market Index (SMI) retreated 0.1 percent to 8,284.42 at 9:50 a.m. in Zurich. The equity benchmark climbed 0.5 percent yesterday to its highest level since May 22. The gauge has rallied 3.3 percent so far in October as U.S. lawmakers reached an agreement to increase the federal government’s debt limit, avoiding a sovereign default. The broader Swiss Performance Index dropped less than 0.1 percent today.

UBS sank 6.2 percent to 18 Swiss francs. The bank had planned to reach a 15 percent return on equity in 2015. Switzerland’s largest lender also reported third-quarter net income of 577 million Swiss francs ($643 million), beating the average analyst estimate of 561 million francs.

The Federal Open Market Committee starts a meeting today to consider whether to start reducing the $85 billion-a-month of bond purchases that have buoyed global markets. Policy makers will hold off paring bond buying until their March 18-19 meeting, a Bloomberg survey showed this month.

A Commerce Department report at 8:30 a.m. in Washington may show that U.S. retail sales stalled in September. Economists forecast no change in purchases, the first time sales have failed to grow since March, according to a Bloomberg survey. They climbed 0.2 percent in August. A separate release from the Conference Board at 10 a.m. will probably show that consumer confidence declined this month.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

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

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