U.S. Stocks Retreat

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

Monsanto Co. lost 7.5 percent after Goldman Sachs Group Inc. said the recession will hurt profit at the world’s largest producer of seeds. Walgreen Co., the second-biggest U.S. drugstore chain, sank 4.2 percent after posting the slowest sales growth in at least 18 years. MetLife Inc., the insurer invested in $36 billion worth of commercial mortgages, tumbled 12 percent as analysts said the number of U.S. non-residential properties at risk of default may triple.

The Standard & Poor’s 500 Index retreated 1.8 percent to 871.63, wiping out last week’s 0.9 percent gain. The Dow Jones Industrial Average slipped 59.42 points, or 0.7 percent, to 8,519.69. The Russell 2000 Index of small companies declined 2.3 percent. Almost four stocks fell for each that rose on the New York Stock Exchange.

European stocks fell for a fourth straight day, extending the Dow Jones Stoxx 600 Index’s worst year on record, as signs increased a deteriorating global economy is snuffing out 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 3.5 percent as Manpower Inc. of the U.S. withdrew its fourth-quarter forecast.

The Stoxx 600 dropped 1.6 percent to 193.32. 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 all the 18 western European markets today except Austria and Ireland. The U.K.’s FTSE 100 slipped 0.9 percent. France’s CAC 40 tumbled 2.3 percent, while Germany’s DAX lost 1.2 percent as Volkswagen AG retreated.

TradingEconomics.com, Bloomberg.com
12/22/2008 1:53:55 PM