January 22, 2010

Top Stories: Stocks

Top Stories: Stocks
2010-01-22 12:48:02.975 GMT

Jan. 22 (Bloomberg) -- The following are the day's top stories
on stocks:

European, Asian Stocks Decline; Deutsche Bank, UBS, ICAP Shares Lead Drop
European and Asian stocks retreated after U.S. President
Barack Obama called for a limit on risk- taking at banks and as
speculation grew that China will increase measures to slow
economic growth. U.S. index futures fell. Deutsche Bank AG,
Germany's largest lender, and UBS AG, Switzerland's biggest
bank by assets, slid more than 5 percent. ICAP Plc, London
Stock Exchange Group Plc and Deutsche Boerse AG dropped more
than 3 percent on concern Obama's proposals will reduce trading
volumes. Europe's Dow Jones Stoxx 600 Index declined for a
third day, slipping 1.4 percent to 249.29 at 12:00 p.m. in
London. The measure has retreated 2.8 percent this week,
erasing this year's advance. The gauge has surged 58 percent
since March, boosted by record-low interest rates in the U.S.
and Europe and about $12 trillion committed by governments
worldwide to thaw credit markets and revive economic growth.
The Obama plan ``poses a question on the long-term evolution of
the financial industry,'' said Guillaume Duchesne, a
Luxembourg-based equity strategist at Fortis Private Banking,
which oversees about $117 billion. ``Profitability will be
constrained with stricter regulation. That doesn't favor the

France's Top Fund Manager Lalevee Bets on Growth Stocks for 2010 Returns
Sebastien Lalevee, manager of France's two best-performing
domestic equity funds in 2009, says he will continue his
success this year by investing in faster- growing companies and
those that get sales in emerging markets. The Financiere
Arbevel Pluvalca France fund returned 66 percent last year,
beating the benchmark SBF 120 Index's 24 percent advance and
all comparable funds, according to data compiled by Bloomberg.
The Pluvalca France Small Caps fund, also managed by Lalevee,
jumped 63 percent. Lalevee, 38, benefited in 2009 from
companies most tied to economic growth, including Paris-based
chemical company Rhodia SA and Bull SA, France's largest
computer maker. For this year, the Pluvalca France fund, which
can invest as much as 25 percent of assets outside France, has
been buying shares of Copenhagen- based brewer Carlsberg A/S to
profit from its expansion in emerging markets and Neubiberg,
Germany-based Infineon Technologies AG, Europe's second-largest
semiconductor maker. ``In periods of economic instability, such
as today, we favor growth shares,'' Lalevee, who left his
analyst position at Citigroup Inc. in 2008, said in an
interview. ``Last year, it was about industry picking. Today
it's about choosing high- quality growth stocks in each

Asian Stocks Fall for Fifth Day on China Tightening Concern; Toyota Drops
Asian stocks fell for a fifth day, dragging the MSCI Asia
Pacific Index to its biggest weekly drop since June, amid
concern China will take more steps to curb price increases in
an economy that has led the global recovery. Jiangxi Copper Co.
and Aluminum Corp. of China Ltd. slumped more than 1 percent in
Hong Kong after they were downgraded by Goldman Sachs Group
Inc., which cited increasing risks from inflation. BHP Billiton
Ltd., the world's largest mining company, sank 2.3 percent on
speculation Australia will raise taxes on resource projects.
Toyota Motor Corp., which gets 32 percent of revenue in North
America, fell 3.2 percent after the yen rose to a one-month
high versus the dollar. The MSCI Asia Pacific Index fell 1.3
percent to 122.27 as of 5:04 p.m. in Tokyo. The gauge has
slumped 3.5 percent in the past five days, the most since the
week ended June 19. China said yesterday that fourth-quarter
gross domestic product grew 10.7 percent from a year ago, while
the World Bank said developing Asian economies face the risk of
asset bubbles. ``There are some worries about the extent of
tightening in China,'' said Shane Oliver, head of investment
strategy in Sydney at AMP Capital Investors, which oversees
about $90 billion globally. ``I don't think they're seeking to
crunch their economy, but obviously the market worries that
that will be the case.''

U.S. Stock-Index Futures Retreat; Shares of Freeport, Google, Amex Drop
U.S. stock-index futures fell, with the Standard & Poor's
500 Index poised to post a second weekly decline, as Goldman
Sachs Group Inc. cut its stance on U.S. steel stocks and Google
Inc. shares fell. Freeport-McMoRan Copper & Gold Inc. retreated
in early New York trading after the Goldman Sachs downgrade.
Google declined after reporting fourth-quarter sales growth
that failed to top the most optimistic of analysts' estimates.
Schlumberger Ltd. retreated as the company said net income
dropped to $795 million from $1.15 billion in the fourth
quarter. Futures on the S&P 500 expiring in March lost 0.2
percent to 1,109.1 as of 12:26 p.m. in London. The index has
slipped 1.7 percent so far this week. Dow Jones Industrial
Average futures retreated 0.3 percent to 10,308 today and
Nasdaq-100 Index futures added less than 0.1 percent to
1,841.25. ``There are good arguments for both sides of the
story but I wouldn't be too aggressive regarding the portfolio
beta right now,'' said Markus Steinbeis, head of equity
portfolio management at the German unit of Pioneer Investments,
which oversees about $221 billion globally. ``We have seen a
strong rally and now we have a correction. The question is to
know if it's going to be a small one or a bigger one.''

Brazilian Stock-Index Futures Sink on Global Growth Concern; Real Declines
Brazilian stock-index futures dropped as commodity prices
sank amid concern higher interest rates in China and proposed
U.S. banking reforms will slow the global economic recovery.
Vale SA, the world's biggest iron-ore miner, may drop as
nickel, zinc and copper decline. Petroleo Brasileiro SA,
Brazil's state-controlled oil company, may fall as oil slips
below $76 a barrel. Bovespa stock-index futures fell 0.6
percent to 66,200 at 7:37 a.m. New York time. The Bovespa stock
index fell yesterday, completing the biggest two-day drop since
October, after China's growth boosted concern the nation will
move to cool its economy, weakening demand for Brazil's
exports. Crude oil is poised for its second weekly decline.
Higher- than-expected economic growth in China, the world's
largest metals user and second-biggest energy consumer, fueled
concern the world's fastest-growing major economy will raise
borrowing costs to keep its economy from overheating. U.S.
President Barack Obama yesterday proposed to limit the size of
banks and prohibit them from speculative investing to reduce

NYSE, Nasdaq Shares Slide After Obama Proposes Proprietary Trading Limit
NYSE Euronext and Nasdaq OMX Group Inc., the owners of the
two largest U.S. stock exchanges, tumbled after President
Barack Obama called for restricting trading activities at
financial institutions. Obama's proposals would prohibit banks
from running proprietary trading operations or investing in
hedge funds and private equity funds. Banks run proprietary
trading desks for their own monetary benefit, not for their
clients. The plan is subject to approval by Congress. The
exchanges depend on trading-related fees for the majority of
their sales. NYSE gets almost two-thirds of its revenue from
fees paid by equities and derivatives traders, according to its
most recent quarterly filing. Investors are concerned that the
limit on trading would hurt exchanges' profits, analysts said.
``Proprietary trading by large financial institutions is a big
part of exchange liquidity,'' said Jamie Selway, founder and
managing director of White Cap Trading LLC, a New York-based
trading firm.

Bovespa's Slump Spurs Brazil's M. Dias Branco to Postpone Share Offering
Brazilian stocks' biggest drop in two months prompted M.
Dias Branco SA, the country's largest maker of cookies and
pasta, to postpone a 600 million reais ($333 million) share
offering. The Fortaleza-based company asked Brazil's securities
regulator to suspend the sale for 60 days, citing ``current
market conditions,'' according to a filing yesterday. Five
other Brazilian companies have share sales planned during the
next two weeks, according to data compiled by Bloomberg.
Emerging-market stocks erased their 2010 gains and Brazil's
Bovespa fell the most among indexes for the 20 largest equity
markets yesterday on concern demand for exports may wane as
China takes steps to cool the economy. M. Dias shares fell for
the first time in four days, dropping 1.4 percent to 41.99
reais, while the benchmark Bovespa index sank 2.8 percent, the
biggest retreat since Nov. 12. ``Brazil is probably the number
one country penalized by what is happening in China because
exports are so important,'' said Uri Landesman, who helps
oversee about $3 billion at ING Investment Management in New
York. ``I'm not surprised to hear about this story, but I think
it's premature'' to postpone the sale, he said.

U.K.' FTSE 100 Falls as Shares of Barclays, LSE, ICAP Drop on Obama Plan
U.K. stocks dropped for a third day, with the benchmark
FTSE 100 Index heading for a second weekly retreat, after U.S.
President Barack Obama called for a limit on risk-taking at
banks. Barclays Plc, ICAP Plc and London Stock Exchange Group
Plc sank more than 5 percent amid concern proposals from Obama
to prohibit U.S. banks from running proprietary trading
operations may lower transaction volumes and hamper the
economic recovery. The FTSE 100 slipped 62.52, or 1.2 percent,
to 5,272.58 at 12:24 p.m. in London, extending its biggest
two-day slump since March. The gauge, which has fallen 2.5
percent so far this year, is still 51 percent higher since
March as more than $12 trillion committed by governments around
the world boosted equity markets. The FTSE All-Share Index
declined 1.1 percent today and Ireland's ISEQ Index slipped 0.6
percent. ``We may not see a huge sell off in the next few days,
but there is a consensus that markets have every chance of
sliding down the hill in the next few months,'' said David
Buik, a markets analyst at BGC Partners in London. ``Regulation
needs to be tidied up on money funds, finance companies and
primary brokerage. Until this regulation issue is sorted out
the President and Congress will run amok and the market may
continue to sell.''

German Stocks Extend Weekly Drop as Deutsche Bank, Deutsche Boerse Retreat
German stocks dropped, with the benchmark DAX Index headed
for a second straight weekly loss, after U.S. President Barack
Obama proposed limits to banks' size and trading. Deutsche Bank
AG, Commerzbank AG and Deutsche Boerse AG paced declines.
Deutsche Lufthansa AG slumped 5.3 percent as the company said
some analyst estimates for 2010 are ``high.'' Daimler AG fell
2.9 percent after Goldman Sachs Group Inc. downgraded the
world's second-biggest maker of luxury cars. The DAX slid 0.7
percent to 5,708.42 as of 12:02 p.m. in Frankfurt, poised for a
third day of declines in the longest losing streak since Dec.
9. The gauge's rally since March 2009 has slowed this year amid
concern the withdrawal of stimulus measures from the U.S. to
China will hamper the global economic recovery. The broader
HDAX Index also fell 0.7 percent today. ``The world is moving
toward higher taxes and more regulation, particularly in the
financial sector,'' a group of analysts at Sal. Oppenheim Jr. &
Cie KGaA, led by Matthias Joerss, wrote in a note to clients
today. ``Government will demand a bigger say in lots of things.
Obviously, it is negative for banks, particularly broad
integrated banks, and stock exchanges.''

Swiss Stocks Fall for Third Day; Credit Suisse, UBS Drop on Obama Proposal
Swiss stocks fell for a third day, led by Credit Suisse
Group AG and UBS AG, after U.S. President Barack Obama
announced plans to curb risk-taking by banks. The Swiss Market
Index lost 0.8 percent to 6,526.19 as of 11:16 a.m. in Zurich,
heading for a weekly drop of 0.7 percent and paring the rally
since March 9 to 51 percent. The broader Swiss Performance
Index slipped 0.7 percent to 5,641.81 today. Concern the U.S.
government's move to regulate banks will cut profits in the
industry is adding to woes that China is trying to curb lending
to cool economic growth. Credit Suisse, Switzerland's biggest
bank by market value, tumbled 4.6 percent to 48.01 Swiss
francs, a fourth consecutive day of losses. UBS, the largest by
assets, dropped 3.9 percent to 14.93 francs.

China Stock Fund Outflows Rise to 18-Week High on Lending Curbs, EPFR Says
Investors pulled $348 million from China equity funds last
week, the biggest outflow in 18 weeks, on concern China's moves
to cool its economy will slow growth, according to EPFR Global.
Chinese stocks fell since the government this month started
tightening monetary policy to curb record loan growth and
prevent bubbles in the nation's property and stock markets. The
Shanghai Composite Index has fallen 3.6 percent this year,
while the Hang Seng China Enterprises Index, which tracks Hong
Kong-traded Chinese companies, is down 6.5 percent, the worst-
performing Asian gauge this year. ``Risk appetite remains on a
very short leash,'' Cameron Brandt, senior analyst at
Cambridge, Massachusetts-based funds tracker EPFR Global, said
in an e-mailed statement. Outflows were the highest since
September, according to EPFR. The Shanghai Composite Index
entered a bear market in August, slumping 22 percent, on
concern a slowdown in lending growth would derail the economic

ICAP, LSE, Deutsche Boerse Drop in Europe on Obama's Plan to Curb Trading
ICAP Plc, London Stock Exchange Group Plc and Deutsche
Boerse AG dropped in Europe after U.S. President Barack Obama
announced plans to restrict some trading activities by
financial institutions. The proposals would prohibit banks from
running proprietary trading operations or investing in hedge
funds and private equity funds. Banks operate so-called prop
desks for their own monetary benefit, not for their clients.
The plan is subject to approval by Congress. Bourses in Europe
and the U.S., including NYSE Euronext and Nasdaq OMX Group
Inc., depend on trading- related fees for the majority of their
sales. ``Given the lack of clarity over whether these proposals
will be implemented, and if so, in what form and over what
timeframe, we see risks that uncertainty will hang over the
market-structure stocks,'' BofA Merrill Lynch Global Research
analysts Philip Middleton and Martin Price wrote in a report to
clients. ``There will be more noise on this front between now
and November as U.S. politicians lobby for popular support
ahead of midterm elections.'' London-based ICAP, the world's
biggest broker of trades between banks, tumbled 6.3 percent to
399 pence as of 9:19 a.m. local time, while LSE fell 2.2
percent to 679.5 pence. Deutsche Boerse, the operator of the
Frankfurt stock exchange, slid 3.5 percent to 50.76 euros.

Nikkei 225 Slumps Most in Two Months on U.S. Bank Proposal, China Concerns
Japan's Nikkei 225 Stock Average slumped the most since
November after the U.S. proposed to reduce risk-taking at banks
and concern mounted that China will raise interest rates to
curb inflation. Inpex Corp., Japan's largest oil explorer, and
Nippon Mining Holdings Inc. lost more than 3 percent after a
U.S. proposal to ban banks from investing in hedge funds
spurred a slump in oil, metals and the dollar. Toyota Motor
Corp., which gets 31 percent of its sales in North America,
fell 3.2 percent. Shin-Etsu Chemical Co. sank 6 percent after
its earnings forecast missed analysts' estimates. ``The U.S.
proposal, as it is now, would discourage people from investing
in higher-risk assets such as stocks and commodities, causing
these markets to shrink,'' said Ayako Sera, a market strategist
at Tokyo-based Sumitomo Trust & Banking Co., which manages the
equivalent of $300 billion. ``People like us in the financial
industry feel opposed to the proposal.'' The Nikkei 225 fell
2.6 percent to close at 10,590.55 in Tokyo, almost erasing this
year's gain. The broader Topix index slid 1.6 percent to
940.94, with six times as many stocks declining as advancing.
Both gauges lost the most since Nov. 27.

Australia Stocks Fall Most in Two Months on Mining Tax Concern; BHP Drops
Australian stocks fell, dragging the benchmark index down
the most in two months, on concern the government may raise
taxes on mining projects and as commodity prices slumped. Rio
Tinto Group, the world's third-biggest mining company sank 3.5
percent after the Sydney Morning Herald reported the government
proposal, without saying where it got the information. BHP
Billiton Ltd., the biggest, declined 2.3 percent as metals
traded in London fell for a second day and oil was poised to
decline for a second week. Newcrest Mining Ltd., Australia's
largest gold producer, slipped 2.4 percent. ``It does look like
we're going through some sort of a correction,'' said Shane
Oliver, head of investment strategy in Sydney at AMP Capital
Investors, which oversees about $90 billion globally. ``The
report about the tax review is weighing on resources stocks.''
Australia's S&P/ASX 200 Index fell 1.6 percent to 4,750.60 at
the close of trading in Sydney, its steepest drop since Nov.
27. The gauge, which declined 3 percent this week, has rallied
51 percent from a five-year low on March 6 as government
stimulus measures helped the country skirt a recession.

China's Stocks Cap Biggest Weekly Loss in More Than a Month; Miners Slump
China's stocks fell, driving the benchmark index to its
biggest weekly loss in more than a month, on concern the
government will raise interest rates to cool the world's
fastest-growing major economy. Jiangxi Copper Co. and Baoshan
Iron & Steel Co., the nation's largest producers of the metals,
declined more than 2 percent after Goldman Sachs Group Inc. cut
its recommendation on the stocks. Industrial & Commercial Bank
of China Ltd. led gains by banks as funds increased holdings
after recent declines made the stocks cheaper relative to the
broader market. The Shanghai Composite Index fell 30.28, or 1
percent, to 3,128.59 at the close. The gauge lost 3 percent
this week, its biggest retreat since the period to Dec. 18. The
CSI 300 Index, measuring exchanges in Shanghai and Shenzhen,
declined 1.2 percent to 3,366.20. ``We're avoiding metals
producers because government tightening will slow down
fixed-asset investment,'' said Wang Zheng, a fund manager at
Jingxi Investment Management Co.

For the complete stories summarized here, and for more of
the day's top news, see TOP <Go>.

-0- Jan/22/2010 12:48 GMT

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