Swiss Stocks Little Changed Amid U.S. Budget Concern

Swiss stocks were little changed, with the benchmark Swiss Market Index posting a weekly loss amid concern U.S. lawmakers will fail to agree on a budget and as borrowing costs rose at an Italian debt auction.

Holcim Ltd. slipped 0.8 percent as HSBC Holdings Plc downgraded its rating on the cement maker. Clariant AG and Givaudan SA retreated, following a gauge of European chemical companies lower. Adecco SA, the world’s largest provider of temporary workers, advanced 1.8 percent as Goldman Sachs Group Inc. recommended the shares.

The SMI fell 0.1 percent to 8,055 at the close of trading in Zurich, bringing this week’s retreat to 0.6 percent. The measure has still climbed 4 percent in September, extending its gain this quarter to 4.8 percent, as the Federal Reserve refrained from reducing its monthly bond purchases. It has rallied 18 percent so far in 2013, the third-best performance by a European developed market. The broader Swiss Performance Index also slipped 0.1 percent today.

“European markets are weaker today amid lower volumes,” said Roland Schuermann, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “Investors are rather cautious ahead of the weekend, also because of the looming budget dispute in the U.S.”

Swiss stocks extended losses as Italy sold 3 billion euros ($4.05 billion) of 10-year bonds at a yield of 4.50 percent, compared with 4.46 percent on Aug. 29. Investors bid for 1.38 times the amount of debt offered, down from 1.52 percent at the previous auction.

Volume Declines

The volume of shares changing hands in SMI-listed companies today was 13 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.

U.S. lawmakers have until Monday to agree to an emergency budget to keep the federal government operating from Oct. 1, the beginning of the 2014 fiscal year, through Dec. 15.

Failure to pass the bill may lead to a government shutdown, which would cut fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, economists said. Mark Zandi of Moody’s Analytics Inc. estimated a three-to-four week shutdown would cut growth by 1.4 points. Moody’s projected a 3 percent rate of growth in the fourth quarter without a closure.

Confidence among U.S. consumers declined to a five-month low in September, according to data released today. The Thomson Reuters/University of Michigan final index of sentiment decreased to 77.5 this month from 82.1 in August. The median estimate in a Bloomberg survey called for a drop to 78, after a preliminary reading of 76.8.

Holcim, Adecco

Holcim, the cement maker that gets 40 percent of its sales from the Asia Pacific region, lost 0.8 percent to 67.95 Swiss francs. HSBC cut the stock to neutral, the equivalent of hold, from overweight, citing weak pricing power in emerging markets.

Clariant fell 0.9 percent to 15.33 francs and Givaudan dropped 0.6 percent to 1,328 francs. A gauge of European chemical shares was among the worst performers of the 19 industry groups in the Stoxx Europe 600 Index.

Adecco jumped 1.8 percent to 64.20 francs. Goldman Sachs raised the stock to buy from neutral, saying improving European economic data should help the company.

Actelion Ltd. climbed 1.7 percent to 64.15 francs. UBS added the drugmaker’s shares to its most preferred list, saying it expects the Opsumit treatment to be approved by the U.S. Food and Drug Administration on Oct. 18 for pulmonary arterial hypertension.

“We believe a clean label could increase consensus expectations for the drug, which we continue to see as overly conservative,” Martin Wales, an analyst at UBS, wrote in a report.

Temenos Group AG rose 3.7 percent to 22.50 francs as the banking-software maker posted a $12.1 million profit in the first half, compared with a loss of $11 million a year earlier.

Edisun Power Europe AG rallied 24 percent to 30.95 francs. Shares in the developer of solar plants slumped 17 percent yesterday after the company said it won’t make a profit in 2014.

Before it's here, it's on the Bloomberg Terminal.