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Swiss Stocks Decline on Spanish Bond Sale; Holcim Drops

Swiss stocks fell by the most in four weeks as demand declined at a Spanish bond auction and minutes from the Federal Reserve’s last meeting reduced expectations for additional monetary stimulus.

Transocean Ltd. dropped 2.3 percent as a Brazilian federal prosecutor sued the world’s largest operator of offshore drilling rigs over an oil spill. Holcim Ltd., the second-biggest cement maker, retreated 2.7 percent, following a gauge of European construction companies lower. Banks declined.

The Swiss Market Index, a measure of the largest and most actively traded companies, sank 1.5 percent to 6,166.79 at the close in Zurich, its biggest drop since March 6. The volume of shares changing hands in SMI-listed companies was 19 percent higher than the average over the past 30 days, according to data compiled by Bloomberg. The broader Swiss Performance Index also lost 1.5 percent today.

“The worries regarding the crisis in Europe are not over,” said Lars Knudsen, who manages about $110 million at LGT Capital Management AG in Pfaeffikon, Switzerland. “The Spanish bond sale results weren’t that great, which is not good for market confidence. The market is reacting negatively to the minutes as they see less of a chance for a third round of quantitative easing.”

The SMI dropped yesterday as orders to U.S. factories increased less than economists had forecast. The benchmark gauge has still gained 3.9 percent this year as the European Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to the region’s lenders.

Fed Policy

Fed policy makers said that the improving economy lessened the need for stimulus even as they stuck to a plan to hold the benchmark interest rate near zero at least through late 2014.

Officials called for additional stimulus only “if the economy lost momentum” or if inflation stays below their 2 percent inflation target, according to minutes of their March 13 meeting released yesterday. That contrasted with the minutes of their January meeting in which some policy makers saw the economy requiring additional action “before long.”

Swiss stocks extended losses after Spain sold 2.6 billion euros of bonds, near the minimum target, and its borrowing costs rose in its first auction since announcing that public debt will surge to a record this year. The nation auctioned 973 million euros of five-year notes at an average yield of 4.32 percent. Investors bid for 2.46 times the amount of debt allotted. That compared with a bid-to-cover ratio of 2.59 at the previous auction of the securities on March 1.

ECB Rate Decision

The ECB left its benchmark interest rate unchanged at a record low of 1 percent today as policy makers.

“The ECB remains in a wait and see attitude,” Ulrich Wortberg, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in e-mailed comments. “The ECB’s view which, at least in the short-term, sees risk in increased inflation, leaves no room for further monetary policy easing.”

Transocean fell 2.3 percent to 47.69 Swiss francs. A Brazilian federal prosecutor sued the company, along with Chevron Corp., for 20 billion reais ($11 billion) over an oil spill at the Frade field off the nation’s coast. Prosecutors filed a previous 20 billion-reai lawsuit last year after the first leak spill at the project -- a 3,000-barrel leak in November.

Holcim, UBS Drop

Holcim retreated 2.7 percent to 56.30 francs as a gauge of construction companies was the second-worst performer of 19 industries in the Stoxx Europe 600 Index. Geberit AG, Europe’s biggest maker of toilet-flushing systems, slid 2.4 percent to 186.60 francs. Sika AG, the region’s largest maker of chemicals used in construction, slipped 4.1 percent to 1,919 francs.

Financial shares also pushed the SMI lower, with UBS AG and Credit Suisse Group AG, Switzerland’s largest lenders, falling 2.7 percent to 12.13 francs and 3.1 percent to 24.70 francs, respectively. Swiss Re Ltd., the world’s second-biggest reinsurer, lost 2.8 percent to 56.65 francs.

Meyer Burger Technology AG, the biggest maker of solar-panel manufacturing equipment, retreated 1.8 percent to 13.55 francs, its lowest price this year, as polysilicon prices dropped for a fifth week.

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