London Stock Exchange
Bloomberg
European stocks fell for a fourth day as Japanese machinery orders tumbled the most in a decade and Spanish bonds sank before a meeting of euro-area finance ministers. U.S. index futures and Asian shares retreated.
Metro AG (MEO), Germany’s biggest retailer, sank to a three-year low as Chief Executive Officer Olaf Koch said restrained spending will have a “significant impact” on business. Vestas (VWS) Wind Systems A/S dropped 6.1 percent after a report that the biggest maker of wind turbines may sell shares. Michael Page International Plc (MPI) retreated 4.5 percent after the U.K. recruitment company reported a decline in profit.
The Stoxx Europe 600 Index (SXXP) slipped 0.4 percent to 253.35 in London as the yield on Spain’s 10-year bonds climbed to more than 7 percent. The equity gauge has risen for five straight weeks, the longest winning streak since January, as the region’s policy makers eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy.
“The main themes on the market remain the debt crisis and where southern European rates are heading,” said Michael Borre, the chief equity analyst at Nordea Private Banking in Copenhagen. “That’s why we continue to expect markets to stay nervous and volatile this week.”
Standard & Poor’s 500 Index futures dropped 0.5 percent before Alcoa Inc. kicks off the U.S. earnings season. The MSCI Asia Pacific Index lost 1.5 percent.
According to Bloomberg report, Euro-area finance ministers are due to meet in Brussels today to follow up on the crisis-fighting measures adopted by leaders of the 17 euro countries last month.
The yield on Spain’s benchmark 10-year bond rose to 7.097 percent, the highest since June 19, at 10:32 a.m. in Madrid. That was above the 7 percent threshold that prompted full bailouts of Greece, Ireland and Portugal.
Bankia SA (BKIA), the third-biggest Spanish lender, dropped 4.5 percent to 81.1 euro cents to lead declines among Iberian banks. Banco Santander SA (SAN) and Banco Bilbao Vizcaya Argentaria SA (BBVA) fell 3.7 percent to 4.72 euros and 4 percent to 4.97 euros, respectively.
Japanese machinery orders, an indicator of capital spending, fell 14.8 percent in May from the previous month, the Cabinet Office said, the biggest drop since 2001. Economists surveyed by Bloomberg had expected a 2.6 percent decline.
In the U.S., Alcoa, the biggest American aluminum producer, is scheduled to unofficially start the second-quarter earnings season when it releases results after the close of trading today.
Analyst estimates compiled by Bloomberg project a 1.8 percent decline in profits for S&P 500 companies in the April- June period, which would mark the first year-over-year decrease since 2009, even as revenue increased 2.5 percent. Analysts still predict profit growth of 7.2 percent for the full year.
Metro lost 6.3 percent to 20.44 euros, the lowest since March 2009. The owner of Cash & Carry outlets, Kaufhof department stores and the Saturn electronics chain sees a “small increase at best” in German consumption this year, CEO Koch said in an interview with Bild am Sonntag published yesterday. Ruediger Stahlschmidt, a spokesman for the company, declined to comment further on the report.