Profit outlook leads to decline

By Sarah Jones  |   2008-11-12  |     NEWSPAPER EDITION

STOCKS fell in Europe and Asia, led by financial shares and commodity producers, on a worsening profit outlook and drop in oil and metals prices. United States index futures retreated.

Swiss banking firm Julius Baer Holding Ltd slipped 6 percent after saying assets under management declined. Taylor Wimpey tumbled 17 percent in London after the home builder said orders have fallen 40 percent, while Citizen Holdings dropped 9.5 percent in Tokyo as the world's largest watch maker cut its profit forecast.

Starbucks, the world's biggest chain of coffee shops, sank 3.5 percent in Germany after earnings missed analysts' estimates.

The MSCI World Index lost 1.7 percent to 924.59 at 12:25pm in London, falling for the first time in three days. More than US$28 trillion has been erased from the value of global equity markets as credit losses and writedowns topped US$920 billion in the worst financial crisis since the Great Depression.

Futures on the Standard & Poor's 500 Index slid 2 percent. Europe's Dow Jones Stoxx 600 Index declined 3 percent with Erste Group Bank and BHP Billiton losing at least 5 percent. The MSCI Asia Pacific Index dropped 3.6 percent.

Expectations

Earnings for the 1,246 companies in western Europe that reported results since October 7 declined 11 percent on average, trailing expectations by 4.5 percent, Bloomberg data show.

Profits for the 428 companies in the S&P 500 that have reported, including Boeing Co and AT&T Inc, have shrunk 17 percent, while missing predictions by some 4.7 percent.

The MSCI Emerging Markets Index slumped 2.9 percent as stocks in Russia, the world's second-biggest oil producer, sent the Micex down 9.4 percent.

The Dubai Financial Market General Index fell 7.3 percent to the lowest in almost four years, led by developers.

China's CSI Index slipped 1.1 percent, as export growth cooled to 19.2 percent in October from a year earlier.

Allianz SE, Europe's largest insurer, dropped 6.6 percent to 60.92 euros. Swiss Life Holding, Switzerland's biggest life insurer, slumped 8.1 percent to 109.1 francs.