Europe’s benchmark equity index fluctuated amid mixed earnings, while the euro traded near a nine month low versus the dollar. Banco Espirito Santo SA shares were suspended after it said it will need to raise funds while emerging-market stocks fell and crude oil dropped.

The Stoxx Europe 600 Index was little changed at 8:25 a.m. in London, as Adidas AG plunged after slashing its profit forecast and Fresenius SE surged after earnings beat analysts’ estimates. Standard & Poor’s 500 Index futures slid 0.1 percent. The MSCI Emerging Markets Index retreated 0.5 percent. The euro traded at $1.3386. Oil in New York slid below $100 a barrel.

Federal Reserve officials cut bond buying by $10 billion for the sixth consecutive time, noting a “significant underutilization of labor resources” before an employment report tomorrow. Their comments signal they’re wary of raising interest rates too soon even after the U.S. economy grew a more-than-estimated 4 percent in the second quarter. S&P said Argentina defaulted after the nation missed an interest payment on $13 billion of debt.

“Prospects for the U.S. economy in the second half look OK, it’s steady as she goes,” said Ali Jalai, a Singapore-based bond trader at Scotiabank, a unit of Bank of Nova Scotia, one of 22 primary dealers that trade directly with the Fed. “The bond market sold off. Perhaps prices can fall a little bit more.”

BNP Loss

The developing-markets equity gauge was heading for its longest streak of monthly gains since 2006. The Stoxx 600 trades at 15.4 times estimated earnings compared with 16.5 times for the S&P 500 and 13.7 times for the MSCI Asia Pacific Index.

Portugal’s Banco Espirito Santo SA had trading in its shares paused after falling 29 percent in four days. The lender said it needs to raise capital after posting a first-half net loss of 3.6 billion euros ($4.8 billion) as it created provisions for its exposure to companies of Grupo Espirito Santo, which includes its biggest shareholder.

Adidas plunged 9.7 percent after the sportwear maker projected 2014 net income of 650 million euros compared with a previous forecast for as much as 930 million euros. Fresenius jumped 5 percent as the pharmaceutical maker boosted its 2014 sales outlook.

BNP Paribas SA, France’s biggest bank, climbed 1.9 percent after posting a 4.32 billion loss, the largest in its 14-year history, that was wider than the 4.27 billion euro average estimate of 11 analyst estimates compiled by Bloomberg.

Retail Results

Metro AG, Germany’s largest retailer, dropped 3.3 percent after it reported fiscal third-quarter profit that met analysts’ estimates as a later Easter helped offset weak demand at the company’s electronics stores. Carrefour SA was little changed as the French supermarket operator reported first-half profit that exceeded analysts’ estimates as sales strengthened in Europe.

The Kospi index in Seoul dropped 0.3 percent after closing at an almost three-year high yesterday. Samsung tumbled after net income, excluding minority interests, came in at 6.18 trillion won ($6 billion) in the three months ended June, short of the 6.83 trillion-won average of 17 analyst estimates compiled by Bloomberg. Samsung has the biggest weighting in the MSCI Emerging Markets Index.

Taiwan’s benchmark stock index dropped 1.4 percent, the most among Asia’s benchmark gauges. Taiwan Semiconductor Manufacturing Co. retreated 2.8 percent as technology companies fell.

Hong Kong

A gauge of Chinese shares in Hong Kong was little changed on its way to a 7.7 percent gain for the month. China’s money-market rates declined as the central bank lowered the interest rate it pays on 14-day repurchase agreements, which were auctioned today for the first time in three months.

The S&P 500 ended the U.S. session up less than 0.1 percent as weaker-than-expected earnings reports and the Fed’s decision to continue tapering stimulus overshadowed the economic data.

U.S. gross domestic product rose 4 percent on an annualized basis in the second quarter after shrinking 2.1 percent January through March, Commerce Department figures showed yesterday in Washington. The median forecast of 80 economists surveyed by Bloomberg called for a 3 percent advance.

A separate report from the ADP Research Institute showed companies in the U.S. added 218,000 workers to payrolls in July, below the median economists’ forecast for a 230,000 advance. The private employment report came before Friday’s data from the U.S. government that may show the addition of 231,000 non-farm employees in July, according to the median projection, after an increase of 288,000 in June.

Crude Supplies

U.S officials led by Chair Janet Yellen are evaluating when to raise key borrowing costs for the first time since 2006 as unemployment falls faster than expected and inflation picks up toward their 2 percent goal.

West Texas Intermediate crude sank to $99.31 a barrel, after settling at a two-week low of $100.27 last session. A U.S. government report showed gasoline supplies climbed last week as demand slipped. Inventories rose by 365,000 barrels to 218.2 million, the highest level in four months, the Energy Information Administration said yesterday.

Brent crude dropped 0.5 percent in a second day of declines, to $105.98 a barrel in London.

Emerging-market currencies slid versus the dollar. A gauge that tracks the performance of 20 developing-nation currencies slid for a sixth day as India’s rupee weakened 0.4 percent to 60.3050. The won closed at 1,027.78 in Seoul.

South Africa’s rand lost 0.3 percent to 10.6862 against the greenback and Malaysia’s ringgit traded 0.2 percent lower at 3.1920 to a dollar.

Russia’s ruble advanced 0.4 percent to 35.4630 per dollar in a second straight gain and strengthened to 47.5 to the euro. The Micex Index in Moscow climbed a third day and the yield on the country’s 2027 bond was little changed.

 

Source: bloomberg

---