U.S. Stocks Retreat

U.S. stocks fell, erasing last week’s advance, as a deteriorating outlook for corporate earnings offset expectations that government stimulus efforts will revive the economy.

Walgreen Co., the second-largest U.S. drugstore chain, tumbled 4.5 percent after first-quarter profit trailed analysts’ estimates. Monsanto Co. declined 7.2 percent as Goldman Sachs Group Inc. said the recession will drive down earnings at the world’s largest producer of seeds. Citigroup Inc. and JPMorgan Chase & Co. climbed more than 1 percent after China cut interest rates and President-elect Barack Obama planned to step up a proposal to bolster the job market.

The Standard & Poor’s 500 Index, which climbed 0.9 percent last week, retreated 1.2 percent to 877.31 at 10:12 a.m. in New York. The Dow Jones Industrial Average slipped 45.72 points, or 0.5 percent, to 8,533.39. The Russell 2000 Index of small companies lost 2.1 percent.

European stocks fell for a fourth straight day, extending the Dow Jones Stoxx 600 Index’s worst year on record, as concern mounted the deteriorating global economy will curb earnings.

Daimler AG and Bayerische Motoren Werke AG sank more than 3 percent after Japan’s Toyota Motor Corp. forecast its first operating loss in 71 years on plunging North American and European car sales and a surging yen. Randstad Holding NV, the world’s second-largest staffing company, slid 3.8 percent as Manpower Inc. of the U.S. withdrew its fourth-quarter forecast.

The Stoxx 600 dropped 1.1 percent to 194.34 at 2:46 p.m. in London. The measure has slumped 47 percent this year as credit- related losses and writedowns at financial firms worldwide topped $1 trillion and the U.S., Europe and Japan entered the first simultaneous recessions since World War II.

National benchmark indexes fell in 12 of the 18 western European markets today. The U.K.’s FTSE 100 added 0.1 percent. France’s CAC 40 tumbled 1.2 percent, while Germany’s DAX lost 0.4 percent as Volkswagen AG also retreated.

Asian stocks fell for a second day, led by commodity and financial companies, on signs the deepening global recession is hurting corporate profits.

The MSCI Asia Pacific Index fell 0.3 percent to 89.23 as of 7:17 p.m. in Tokyo, with most of the region’s markets dropping except Japan, New Zealand, and Vietnam. The Nikkei 225 Stock Average gained 1.6 percent, as Nomura Holdings Inc. advanced after Barron’s said profits from Lehman Brother Holdings Inc. assets may drive the stock higher.


TradingEconomics.com, Bloomberg
12/22/2008 7:31:35 AM