The FTSE 100 closed deep in the red, hit by US subprime fears and a downturn by oil and financials. A CBI report showed factory orders fell much more than expected in the UK in July, hurting sentiment. Wall Street was lower on a glum outlook from USG Corp. and short-of-forecast numbers from Texas Instruments and DuPont. WTI slumped to US$73.18/bbl.
At home, oil giant BP (-1.83%) moved into the red, despite better-than-expected 2Q numbers, as crude dropped. Mining heavyweight BHP Billiton (-1.71%) reported record output across units, with particularly solid 4Q gains achieved in copper, nickel and coal. Yell (+0.91%) published 1Q numbers ahead of expectations. Reckitt Benckiser (+1.03%) soared ahead of tomorrow's 2Q result. Severn Trent (-1.93%) said trading is in line and maintained outlook. Sports Direct (-24.87%) plummeted, after warning there should be limited growth in EBITDA in the current financial year. Wolfson (-2.66%) gave up early gains posted on the back of strong 2Q revenues and a record backlog.
In M&A, The Times noted speculation has mounted that US private investment firm JC Flowers plans to combine with an overseas trade buyer to thwart the merger between Resolution (-0.71%) and Friends Provident (-1.64%).
The CAC 40 (-1.56%) closed firmly in the red, with Wall Street trading negatively following disappointing results from Texas Instruments and DuPont.
PSA (+1.38%) was the top percentage gainer, and one of only two blue chips to end in positive territory, after Morgan Stanley highlighted the high probability of delight at 1H figures vs relatively low expectations. Alstom (+0.05%) also finished up.
On the downside, STM (-2.56%) was hit as Texas Instruments' 3Q outlook disappointed. According to the Australian press, Arcelor Mittal (-1.24%) may be mulling an offer for Bluescope Steel. Air France-KLM (-0.21%) is said to be seriously interested in a merger with Alitalia, according to the Dutch press. The UK's advertising watchdog is to take L'Oreal (-0.41%) to task for embellishing models with extra lashes in ads for mascara, The Times reported. LVMH (-0.71%), with 1H results on Thursday, has moved a step closer to buying Les Echos from Pearson in a deal valued at €240m, wrote The WSJ. Lagardere's (-0.9%) Hachette Distribution Services arm could sell its Virgin France unit, according to Les Echos. In the wider market, M6 (+0.47%) rose after posting interim figures ahead of expectations. /John West - S&P MarketScope, email@example.com
Xetra-Dax (-1.73%) closed firmly lower as US markets took a knock amid renewed concerns about the housing market after soft guidance from building materials group USG Corp. Texas Instruments' 2Q revenues also disappointed overnight and read across negatively to Infineon (-2.02%). MAN (+1.54%) was the only Dax stock up at close after Merrill Lynch upgraded the stock to buy.
In local news, investors were disappointed that Wincor Nixdorf (-6.5%) did not up its guidance, while reporting 9M sales of €1.6bn and net profit of €76m, in line with expectations. Comdirect (+0.9%) reported 1H PTP of €47.4m, up 1.1% y/y. Earnings after tax at the online broker rose 2.9% to €31m. Away from earnings, Les Echos wrote that Nokia Siemens Networks is on the verge of making a US$7bn public offer for Tellabs - Siemens dropped by 1.33%. Hugo Boss (-1.31%) mulls buying second well-known brand from next year, but will complete an internal reorganisation before going ahead with any acquisition, CEO Bruno Saelzer told FAZ.
Looking ahead to tomorrow, DCX (-1.31%) will present divisional 2Q figures for Mercedes, Trucks and Van/bus/other. A consensus estimate puts EBIT at €1.008bn, €295m and €228m, respectively.
Nordic exchanges closed firmly in the red with Telenor (-5.53%), Statoil (-2.73%) and Norsk Hydro (-2.2%) weighing.
Telenor underperformed as the 2Q report showed a fall in headline numbers, just below consensus. Norsk Hydro delivered a strong set of 2Q figures, beating both last year's numbers and forecasts on many fronts. However, it missed expectations in terms of operating revenues. MTG (+1.18%) reported 2Q with revenues a tad ahead of forecasts. Husqvarna's (-1.49%) 2Q showed PTP ahead of estimates, while sales came in weaker than expected. Trelleborg (-5.28%) reported 2Q with revenues ahead of estimates, while EBIT disappointed. Elsewhere, Finnair (+2.02%) outperformed on news it will book a €5.5m gain for sale of four planes.
Nokia (-0.95%) is said to have offered c.US$7.00bn-US$7.4bn to acquire Tellabs, according to Thestreet.com. The Helsinki bellwether will also acquire Twango, reports The WSJ. In broker activity, Goldman lifted its target objective on both Nordea (-0.54%) and SHB (+0.25%).
The Ibex 35 ended Tuesday's session almost 150 points lower as Wall Street fell after disappointing results from Texas Instruments and DuPont, while building materials firm USG said the housing slump is likely to continue.
Of local note, Manuel Jove confirmed that he has bought a 4.9% stake in BBVA (+1.05%), following news this morning that UBS was selling €3.2bn worth of notes exchangeable into the Spanish bank's shares. In earnings news, Gas Natural (-2.89%) said 1H EBITDA rose 20.6% to €1.127bn and EBIT rose 28.2% to €790.1m; numbers were below forecasts. Banco Pastor's (-0.73%) results topped estimates. Almirall (-1.84%) unveiled 1H EBITDA up 32.2% to €118.15m. The pharma group said GW Pharmaceuticals has delayed registration of its Sativex drug, for which Almirall holds the European marketing rights. Telefonica's (-1.61%) O2 Germany is to cut 700 jobs, according to ABC. Vocento (+1.07%) is finalising the acquisition of free paper 'Que', writes Cinco Dias. Prisa (-1.3%) now holds 94.4% of Portugal's Media Capital. Pescanova (+0.78%) has acquired US prawn farmer Ladex.