Swiss Stocks Drop for Second Day as Nestle Falls on Sales
Nestle, which makes up 21 percent of the benchmark Swiss Market Index by weight, slid 2.6 percent after reporting the slowest first-half revenue growth in four years. Adecco SA jumped to a two-year high as the biggest provider of temporary workers posted income that exceeded projections. Transocean Ltd. (RIGN), the largest offshore-rig contractor, added 1.1 percent after posting a second-quarter profit.
The SMI slipped 23.02 points, 0.3 percent, to 7,953.26 at 4:19 p.m. in Zurich. The gauge rallied 2.1 percent last week as the European Central Bank said interest rates will remain low for an extended period of time and the Federal Reserve maintained its monthly bond purchases. The broader Swiss Performance Index lost 0.1 percent today.
“As we get into thinner and thinner trade in this part of the summer, the story will continue to be a tug of war between fundamental data and worries over central-bank stimulus,” Lorne Baring, who helps oversee about $500 million as managing director of B Capital SA in Geneva, said in a telephone interview. “Nestle is a giant bellwether which many investors would look at as an indicator of the global picture.”
The volume of shares changing hands in SMI-listed companies was 7 percent greater than the average of the last 100 days, according to data compiled by Bloomberg.
Fed Bank of Cleveland President Sandra Pianalto said yesterday there has been “meaningful improvement” in the labor market and that tapering may be warranted if it continues to strengthen. Fed policy makers are weighing data to determine whether the economy has improved enough to begin reducing their $85 billion in monthly bond purchases.
In China, a report showed that exports and imports rebounded more than estimated in July. Exports rose 5.1 percent from a year earlier, the General Administration of Customs said in Beijing today. That compares with the median estimate for a 2 percent increase in a Bloomberg News survey and June’s 3.1 percent drop. Imports rose 10.9 percent.
Nestle decreased 2.6 percent to 63 francs, contributing the most to the SMI (SMI)’s drop. Revenue in the first half increased 4.1 percent, excluding acquisitions, divestments and currency shifts. That missed the median estimate of 4.5 percent growth.
Adecco advanced 4.3 percent to 62.75 Swiss francs. Second-quarter net income rose 12 percent to 126 million euros ($169 million), topping the 112.1 million-euro estimate of eight analysts in a Bloomberg survey. The company also confirmed its target of an earnings before interest, taxes and amortization margin of more than 5.5 percent by 2015.
“Adecco fulfilled expectations on all levels,” Patrick Hasenboehler, an analyst at J. Safra Sarasin in Zurich, wrote in a report to clients. “The outlook statement is quite promising. Adecco (ADEN)’s strategy of focusing on profitability will continue to pay off.”
Transocean climbed 1.1 percent to 44.94 francs. Net income in the second quarter amounted to $307 million, or 84 cents a share. That compares with a net loss of $304 million, or 86 cents, a year earlier.
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