Stocks Drop Worldwide

Stocks declined around the world, driving Europe’s Dow Jones Stoxx 600 Index to the lowest level in more than five years, as concern deepened the global economic slump will erode earnings., Bloomberg 1/23/2009 7:05:11 AM

Samsung Electronics Co. slid 4.1 percent after the largest maker of memory chips reported its first quarterly loss. Infineon Technologies AG, Europe’s second-biggest semiconductor maker, sank 4.2 percent as its Qimonda unit filed for insolvency. Pfizer Inc. retreated 3 percent in early New York trading after the Wall Street Journal said the drugmaker is in talks to buy Wyeth.

The MSCI World Index dropped 1.4 percent to 819.02 as of 12:57 p.m. in London. Disappointing earnings from Nokia Oyj to Microsoft Corp. and speculation banks may need to raise more capital to shore up their balance sheets has sent the measure to its third straight weekly decline.

Europe’s Stoxx 600 lost 1.8 percent to 179.50. A close at this level would be the lowest since April 2003. The MSCI Asia Pacific Index retreated 2.6 percent as Sony Corp. tumbled.

Asian stocks fell, dragging the regional benchmark index down for a third week, as losses at Sony Corp. and Samsung Electronics Co. showed the global recession is hurting profits.

Japan’s Nikkei 225 Stock Average dropped 3.8 percent, while Australia’s S&P/ASX 200 Index declined 4.1 percent to a five-year low.

U.S. stocks slid, extending a global slump that sent Europe’s benchmark index to a five-year low, as disappointing results at companies from Xerox Corp. to Advanced Micro Devices Inc. spurred concern the profit slump is worsening.

AMD and Xerox fell more than 6 percent on quarterly results that trailed analysts’ estimates after the recession sapped demand for computer chips and copiers. Capital One Financial Corp. tumbled 21 percent after the credit-card company posted a $1.42 billion fourth-quarter loss. Pfizer Inc. retreated 3.5 percent as the world’s largest drugmaker negotiations a potential purchase of Wyeth.

The Standard & Poor’s 500 Index dropped 2 percent to 811.04 at 9:34 a.m. in New York. The Dow Jones Industrial Average lost 2.1 percent to 7,948.69. The Russell 2000 Index slid 1.9 percent.