Wednesday, September 26, 2012

European stock market drop 9-26-2012

European stock market drop 9-26-2012, European Stock Futures : European stock futures declined, following yesterday’s advance, after Federal Reserve Bank of Philadelphia President Charles Plosser said that the third round of bond buying may fail to stimulate growth or hiring. U.S. index futures were little changed, while Asian shares fell.

BHP Billiton Ltd. (BHP) might be active after retreating in Australia as metal prices dropped. Anglo American Plc (AAL) may move after saying that it plans to reduce its production of coal. Myriad Group AG, a software developer, may move after starting a rights issue and reporting a wider first-half loss.

Futures on the Euro Stoxx 50 Index, a benchmark for the euro area, slumped 1 percent to 2,535 at 7:30 a.m. in London. Contracts on the U.K.’s FTSE 100 Index retreated 0.7 percent. Futures on the Standard & Poor’s 500 Index added 0.1 percent, while the MSCI Asia Pacific Index lost 1.3 percent.

“Now that the world’s central banks’ use of extraordinary measures has become a routine policy tool, the positive effect on assets prices is having a diminished marginal effect, and those who argue it is having a negative effect on the real economy continue to grow in numbers and voice,” Jonathan Sudaria, a dealer at Capital Spreads in London, wrote in a note.

Plosser said yesterday after the close of European (SXXP) trading that the Fed’s latest round of asset purchases may jeopardize the central bank’s credibility. The S&P 500 posted its biggest drop since June 25.
Third Round

The Federal Open Market Committee said on Sept. 13 that it will buy mortgage-backed securities at a pace of $40 billion per month until the labor market improves. Policy makers have turned to unconventional tools to attack unemployment that has stayed above 8 percent since February 2009.

BHP, the world’s biggest mining company, slid 1.3 percent in Australian trading. Rio Tinto Group, the third-largest, lost 2 percent. Copper, lead and nickel fell in London trading.

Anglo American may move after saying that it plans to cut coal production in the short term.

Myriad (MYRN) may move. The company announced a 10 million-franc ($10.6 million) fully underwritten rights issue and said that Chief Executive Officer Simon Wilkinson has resigned. Myriad also reported a first-half net loss of $23.3 million.

Infineon Technologies AG (IFX) may slip after Jefferies Group Inc. cut its recommendation on Europe’s second-biggest semiconductor maker to underperform from hold, meaning investors should sell the shares. The stock slumped 6.1 percent yesterday after Infineon predicted sales and profitability will decline in the three months through December.

CGGVeritas announced a 414 million-euro ($533 million) rights offer. The largest seismic surveyor of oilfields said it will sell new stock at 17 euros a share.

Technip SA (TEC), Europe’s second-largest oilfield-services provider, may be active after saying it has received two contracts for refinery projects in Kazakhstan.

Statoil ASA (STL)
, Norway’s national oil company, was cut to sell from buy at Nordea Bank AB.

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