European stocks fell for the first time in three days as companies including Alcatel-Lucent SA (ALU) reported lower earnings and Wolseley Plc said it would sell its French business.
Alcatel plunged the most in almost 14 years after France’s largest telecommunications equipment supplier posted a second- quarter loss. Wolseley slid 1.9 percent after saying it may sell its French business and write down the value of the unit. CSR Plc (CSR) surged 34 percent after Samsung Electronics Co. agreed to buy its wireless technology unit. U.S. Federal Reserve Chairman Ben S. Bernanke told congress that more easing tools are available and the central bank is examining what to do if more needs to be done to boost jobs.
The Stoxx Europe 600 Index (SXXP) slipped 0.3 percent to 256.09 at the close of trading, erasing an earlier advance. The benchmark measure has still climbed 9.5 percent from this year’s low on June 4 as the European Central Bank and People’s Bank of China cut their benchmark interest rates and euro-area leaders eased repayment rules for Spanish banks and conditions for possible Italian aid.
“The market was trading most of the day on hopes that Fed Chairman Bernanke would signal some more QE moves,” said Stephane Ekolo, chief European strategist at Market Securities in London. “But what Bernanke said is that easing tools shouldn’t be used lightly, which means we are somehow far from another round of QE. I think that after that kind of statement there will be more bears than bulls.”
National benchmark indexes fell in eight of the 18 western European markets today. The U.K.’s FTSE 100 (UKX) declined 0.6 percent and France’s CAC 40 slipped 0.1 percent. Germany’s DAX rose 0.2 percent.
Recent economic data have had a “generally disappointing tone,” Bernanke said in the first of two days testifying before Congress as part of the central bank’s semiannual monetary policy report. He said the Fed is prepared to take further action “as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” without offering any specific policy ideas.
Minutes from the Fed’s June meeting, released on July 11, showed that two participants supported additional bond purchases, while two others said only a further deterioration in the economy would warrant them.
Industrial production in the U.S. increased in June, led by gains among automobile and machinery makers. Output at factories, mines and utilities rose 0.4 percent last month after a revised 0.2 percent drop in May that was larger than previously reported, Fed data showed today. Economists had forecast a 0.3 percent gain, according to a Bloomberg survey.
Alcatel-Lucent tumbled 20 percent to 91 euro cents, the largest drop since September 1998. The company said it expects to miss a 2012 profitability target after posting a second- quarter loss as demand for phone gear wanes.
Wolseley (WOS) slid 1.9 percent to 2,283 pence, a fifth day of losses. The building-materials supplier said it may sell its French business and write down the value of that unit and Danish operations amid “difficult market conditions in continental Europe.”
Soitec (SOI) SA sank 22 percent to 2.13 euros, the largest decline since 2002. The manufacturer of semiconductors and solar products reported a 27 percent drop in first-quarter sales and forecast a first-half operating loss.
Bankia SA (BKIA) tumbled 13 percent to 53 euro cents, a record low. Spanish Economy Minister Luis de Guindos said nationalized lenders, including Bankia, will receive fresh capital and be privatized once bad assets are transferred to a bad bank that will be operational before the end of the year, La Vanguardia reported.
CSR rallied 34 percent to 292 pence, the biggest increase since it sold shares in 2004. Samsung, the world’s largest mobile-phone maker, agreed to buy the company’s wireless technology unit for $310 million in cash and take a minority stake in the British chip designer.
Petroleum Geo-Services ASA (PGS), an oilfield surveyor, climbed 9.3 percent to 83.25 kroner after the world’s third-largest surveyor of oil and gas fields said second-quarter earnings would exceed estimates.
CGGVeritas, the biggest seismic surveyor of oilfields, soared 5.7 percent to 22.73 euros in Paris trading, the highest since March. TGS Nopec Geophysical ASA advanced 2.9 percent to 168 kroner.
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